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"Japan's economy continues to pick up but at a more mod-erate pace"
- Bank of Japan
The Bank of Japan downgraded its economic assessment but left monetary policy unchanged on Wednesday, saying the Europe's debt crisis represents the biggest risk to the country's export led recovery.
"Japan's economy continues to pick up but at a more moderate pace, mainly due to the effects of a slowdown in overseas economies," the central bank said in a statement.
"The Japanese economy is in a bind because it depends on foreign demand to grow," said Kazuhiko Sano, chief strategist at Tokai Tokyo Securities. "There is a high probability the BOJ will have to provide more stimulus by around March."