The Bank of Japan decided on Tuesday to maintain aggressive monetary-easing steps to prop up the world’s third-largest economy and overcome years of deflation.
“Japan’s economy has continued to recover moderately as a trend, albeit with some fluctuations due to the consumption tax hike,” the central bank said in a statement, referring the first sales tax increase in 17 years which came into force on April 1.
Economists expected a sharp decline after the government raised the tax to 8 per cent from 5 per cent.
The central bank introduced its monetary easing policy one year ago with the aim of achieving 2—per—cent inflation within about 2 years.
The aggressive policy is aimed at ending years of deflation and slack economic performance.
Consumer prices rose 1.3 per cent in February from a year earlier, for the ninth consecutive month of rise, the government said.
Higher petrol prices and electricity costs amid the falling yen were behind the figures, it said.