The Bank of Japan kept monetary policy steady on Friday and maintained its view that the economy is recovering moderately, encouraged by growing signs that the benefits of its massive stimulus are spreading through broader sectors of the economy.
With the BOJ maintaining its ultra-easy policy even as the U.S. Federal Reserve begins to wind down its own mega-stimulus, the widening interest rate gap between the two economies will help keep the yen weak against the dollar, analysts say.
The dollar struck 104.44 yen on the EBS trading platform on Friday, its highest level since October 2008.
A weak yen benefits Japan's export-reliant economy, and will help the BOJ attain its target of 2 percent inflation target within two years to decisively Lift the country out of a long phase of debilitating deflation.
Governor Haruhiko Kuroda is likely to stress at a post-meeting news conference that the Japanese central bank's resolve to maintain its ultra-loose stimulus even as the Fed begins dialing back its massive asset-buying program.
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As widely expected, the BOJ voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen ($576 billion) to 70 trillion yen.