‘‘Still, the pessimists have a point. Even the optimists aren't convinced that everything is on track. There's still a long way ahead to achieving 2 percent inflation"
-A source familiar with the central bank's policy discussions
Ahead of Wednesday's monetary policy statement and Thursday's press conference, economists pointed out the Bank of Japan is most likely to keep monetary policy on hold, as its unprecedented quantitative easing and a set of measures, introduced by the government, also known as "Abenomics", are spreading through the economy. Since the last meeting, there have been improvements in all sectors of the economy, including the first gain in core consumer prices in more than a year, the first increase in summer bonuses and a drop in the unemployment rate, which reached a 4 1/2 year low. The majority of BoJ members are considering current measures as an appropriate as they seeing the economic recovery is back on track. However, some of them want to see more data to measure the strength of business investment.
The Bank of Japan is widely expected to refrain from more stimulus, by maintaining its pledge of increasing the monetary base at an annual pace of 60-70 trillion yen a year. Furthermore, policy makers are discussing whether to raise the assessment of the economy. Nonetheless, there are still some concerns left, which are posing risks to economic recovery. Some officials are disappointed with the pace of exports growth, while others are citing the slowdown in the growth of China and the U.S. as an even more serious problem, which is likely to weigh on the recovery.
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