Bank Of Japan Declares Economic Recovery

The Bank of Japan formally proclaimed that the world’s third-biggest economy is back on a recovery track, a move that could tip the balance in favor of a planned sales tax hike from next spring as Prime Minister Shinzo Abe nears a final decision on the matter.

The upgrade in the central bank’s assessment will also likely strengthen speculation that the BOJ will hold off on any additional easing for the time being, at least until the sales tax increase from April. The BOJ’s nine-member policy board Thursday decided to stand pat on monetary policy.

The country’s economy “is recovering moderately,” the policy board said in a statement after a two-day meeting ended earlier in the day. The tone of the language is the strongest since March 2008, when the central bank described the economy as “expanding moderately.”

The wording marked an upward revision from the previous month’s assessment that the economy was “starting to recover moderately” — a phrase the BOJ has said was a step short of declaring a full recovery.

Source : Marketwatch