Bank of Japan holds off fresh stimulus, says economy recovering

The Bank of Japan on Tuesday held off expanding its vast stimulus programme, saying the world's number three economy was recovering despite activity taking a hit from April's sales tax hike, AFP reports.

However, policymakers slightly lowered the economic growth forecast for the current fiscal year as they issued their unanimous decision following a two-day policy meeting.

Investors are now awaiting BoJ governor Haruhiko Kuroda's regular news briefing at about 3:30 pm (0630 GMT).

"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," the central bank said in a statement.

"With regard to the outlook, Japan's economy is expected to continue its moderate recovery trend, and the effects of... the consumption tax hike are expected to wane gradually," it added.

The BoJ slightly lowered its growth forecast for the current fiscal year to March to a 1.0 percent expansion in the economy, from an earlier 1.1 percent forecast.

The BoJ's quarterly Tankan survey showed earlier this month Japanese business confidence has sagged since the April 1 sales tax hike, hitting consumer demand, in the first deterioration for six quarters.