BoJ leaves monetary policy unchanged

Japan's central bank on Thursday left its vast monetary easing programme unchanged and boosted its assessment of the economy, using the word "recover" for the first time in more than two years. The Bank of Japan, which unveiled a gigantic bond-buying scheme in April, said the outlook for the world's number three economy was looking up, as brighter corporate and consumer spirits encouraged spending. "Japan's economy is starting to recover modestly," the bank said in a statement after a two-day policy meeting. The comment was seen as a notch stronger than its previous assessment that the "economy has been picking up". It added: "With regard to the outlook, Japan's economy is expected to recover moderately on the back of the resilience in domestic demand and the pick-up in overseas economies." The statement also points to a rise in business and public investment, private consumption and industrial production, while exports were also improving. BoJ board members slightly adjusted their growth forecasts, with their fresh median forecast registering at 2.8 percent in a range of 2.5 to 3.0 percent growth.In April, their median forecast was 2.9 percent growth, in a range of 2.4 to 3.0 percent growth. The central bank said the growth rate and inflation were expected to move "broadly in line with the April forecasts". The bank in April unveiled a multi-billion-dollar bond-buying scheme -- similar to the US Federal Reserve's -- aimed at kickstarting growth in the limp economy and bringing an end to deflation. BoJ governor Haruhiko Kuroda was scheduled to address the media later in the day. Business confidence among Japan's biggest manufacturers surged in the past three months, a closely-watched central bank survey showed earlier in July, in the latest sign of an uptick in the economy. The public has largely cheered the economic initiatives of Prime Minister Shinzo Abe, who came to power in December and has offered a series of huge government spending pledges that run in tandem with monetary easing. The two policies have driven down the value of the yen and given a fillip to exports. But news that the bank would hold off any more policy moves sent the yen higher against the dollar, adding to gains made in New York after the US central bank indicated its own easy-money policy would be kept in place for some time. In afternoon trade the dollar bought 98.62 yen, compared with 99.59 yen in US trade. The Nikkei stock index was down 0.46 percent. Abe appointed Kuroda, a veteran of international finance, as the central banker in March with a promise to generate two percent inflation in two years in a country long beset by growth-sapping deflation. Economists are divided over the merits of Abe's controversial initiatives, dubbed "Abenomics", which are so far a little short on details of how Japan's massive public debts will be tackled or how cossetted industries will be made more competitive.