Japan's central bank maintained its policy stance, as widely expected, tweaking its statement to add that "quantitative and qualitative monetary easing (QQE) has been exerting its intended effects, and the Bank will continue with the QQE, aiming to achieve the price stability target of 2 percent."
This guidance by the Bank of Japan (BOJ) compares with its statement in recent months when it said it would "continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of 2 percent."
The BOJ, which embarked on an aggressive easing campaign in April 2013 with the aim of boosting the country's monetary base by an annual 60-70 trillion yen, also said Japan's economy has continued to "recover moderately as a trend, although the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike has been observed."
Japan's government raised the sales tax on April 1 and the BOJ has often said it expects the economy to bounce back after a decline in demand as a consequence of consumers' boosting their spending ahead of the tax hike.
The BOJ also repeated that the annual consumer price inflation rate, excluding the direct effects of the tax hike, is limey to be around 1.25 percent for some time.
Japan's inflation rate rose to 1.6 percent in March from 1.5 percent in February and the BOJ again said that inflation expectations appear to be rising.
Japan's Gross Domestic Product jumped by 1.5 percent in the first quarter of this year from the fourth quarter's 0.1 percent rise for annual growth of 3 percent, up from 2.5 percent growth rate in the fourth quarter and 2.4 percent in the third quarter.