In Japan individual spending is weak, posing a challenge to Prime Minister Shinzo Abe's economic recovery scheme. -AFP
Japan's central bank gave an upbeat assessment of the world's number three economy on Thursday, but it flagged risks including "developments" in the US and Chinese economies, as well as Britain's exit from the European Union.
The Bank of Japan held fire on fresh policy measures, as expected, following its latest meeting, a day after the US Federal Reserve hiked interest rates and underscored its confidence in the world's top economy.
BoJ policymakers pointed to a "steady recovery" in the economy, even as efforts to boost inflation remain well short of its two-percent target. It has not made a significant move for the past four policy meetings.
"The central bank has little reason to do more now -- the economy is perking up, with a tight labor market stoking inflationary pressures and core consumer prices rising again," said Bloomberg Intelligence economist Yuki Masujima.
Policymakers repeated previous concerns about developments overseas, worried about how US President Donald Trump's protectionist leanings will affect Japan's trade picture. "Risks to the outlook include the following: developments in the US economy and the impact of its monetary policy on global financial markets," the BoJ said.
It also cited edginess about China's economy, which last year grew at its slowest pace in a quarter of a century, while Britain's exit from the EU could have implications for the huge trading bloc.
Later, bank chief Haruhiko Kuroda said the bank's monetary easing plan would remain in place for the time being -- dashing hopes that he might give clues about a timeline for pulling back on its huge asset-buying program.
"Since we're still far off the two-percent price target, it's appropriate to press on with powerful monetary easing," he told a press conference. "The world economy has been on a solid recovery trend since late last year... but we think the downside risks for (Japan's) economy and prices still outweigh the upside."