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Business

Bank of Japan: No widening of stimulus program

Japan's central bank has decided against widening its current monetary stimulus program. But experts warned deflationary pressures might force the Bank of Japan to expand its quantitative easing scheme soon.

Wrapping up a two-day policy meeting Tuesday, the Bank of Japan held off widening its stimulus program under which fresh money worth 80 trillion yen ($660 billion, 623 billion euros) is pumped into markets annually.

"There's absolutely no change to our stance of aiming

to achieve our 2-percent inflation target

at the earliest date possible with a timeframe of roughly two years," BoJ Governor Haruhiko Kuroda said in a statement.

He acknowledged, though, that the drop in oil prices could briefly pull Japan's consumer prices back into negative territory, but insisted the economic economy was on track to ending almost two decades of deflation and fitful growth.

Shipments abroad picking up

Analysts agreed that Japan's economy was emerging from last year's recession thanks to a much-awaited rebound in exports and factory output.

Watch video 01:39

Wages rise in Japan

But private consumption has been found stuck at unsatisfactory levels as households continue to curb spending after being hit by last year's value-added tax hike.

On Wednesday, Japan's largest companies are due to announce their wage plans following annual talks with labor unions. The results will be crucial to Prime Minister Shinzo Abe's push to lead the country out of deflation in a sustainable manner.

hg/ng (AFP, Reuters)

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