THE Bank of Japan (BOJ) stuck with its massive monetary stimulus program yesterday, brushing off a lack of inflation two years after it vowed to lift the economy from years of falling prices.

    Even as its initial time frame for stoking inflation has passed, the central bank maintained that consumer prices are temporarily depressed by cheaper oil, and will gradually rise as consumers and businesses spend more and the economy recovers further.

    The BOJ has been buying bonds and other assets furiously since April 2013 to boost base money — or cash and deposits at the central bank — by 80 trillion yen (US$666 billion) a year, expanding its balance sheet by an amount equal to the size of Australia’s economy.

    But it appears no closer to hitting its target of 2 percent inflation in about two years, part of its promise to pull the world’s third-largest economy decisively out of decades of deflation and spiritless growth.

    After the bank’s widely expected decision to stand pat on policy, BOJ Governor Haruhiko Kuroda stuck to his guns.

    “The broad trend in prices is steadily improving,” he said. “There’s no change to our stance of aiming to achieve 2 percent inflation at the earliest date possible, with a time frame of two years in mind.”

    Kuroda reiterated that the slack was largely gone from the economy while the public expects prices to rise.

    Some market players had speculated the BOJ might expand its massive easing yesterday after inflation ground to a halt and consumer spending remained weak.

    (SD-Agencies)