The Bank of Japan said on Tuesday it would continue aggressive monetary-easing measures to stimulate the world’s third-largest economy and combat years of deflation.
The announcement came the day after the government revised down its economic growth figures for the end of 2013, saying the economy grew at a rate of 0.7 per cent in the October—December period, lower than an earlier reading of 1 per cent.
The central bank said in a statement that “Japan’s economy has continued to recover moderately, and a front-loaded increase in demand prior to the consumption tax hike has recently been observed.” Economists expected consumer spending to continue to grow in the current quarter, but a sharp decline is predicted after the sales tax increase in April, when Tokyo will raise the current 5-per-cent rate to 8 per cent.
Prime Minister Shinzo Abe and the bank’s governor Haruhiko Kuroda have vowed to pull the economy out of 15 years of deflation.
Last April, the central bank decided to introduce its monetary-easing measures with the aim of achieving 2-per-cent inflation within about 2 years.
Consumer prices rose 1.3 per cent in January from a year earlier, for the eighth consecutive month of increase, the government said.