Updated: 06/13/2014 11:17 | By Agence France-Presse

Bank of Japan holds fire on stimulus, says economy recovering

The Bank of Japan on Friday held off expanding its stimulus programme and said the world's number three economy was recovering, despite fears a sales tax rise will dent growth.

Bank of Japan holds fire on stimulus, says economy recovering

Bank of Japan says the economy is recovering, shown here is BoJ Governor Haruhiko Kuroda speaking in Tokyo on March 20, 2014 - by Kazuhiro Nogi'

Policymakers unanimously agreed to hold off any further measures after a two-day meeting. Investors are now awaiting a statement by BoJ governor Haruhiko Kuroda at about 3:30 pm local time (0630 GMT).

The widely expected move comes as the US Federal Reserve winds down its own stimulus and just over a week after the European Central Bank launched unprecedented easing measures to counter the threat of deflation in the eurozone.

Japanese central bankers have held steady since launching a huge monetary easing blitz in April last year as they gauge the impact of a recent sales tax hike that has threatened to derail the country's nascent recovery.

On Friday, the BoJ acknowledged that consumer demand and industrial production had taken a hit after the April 1 tax hike, prior to which millions of shoppers went on a buying spree.

"Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike," the bank said in a statement.

Policymakers noted that overseas economies, particularly among major industrialised nations, were also recovering "albeit with a lacklustre performance still seen in part".

The BoJ's target of achieving 2.0 percent inflation by next year was also on course, it said.

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