TOKYO — The Bank of Japan said Wednesday that the country’s economic recovery “has paused” because of the slowing global economy, leaving its key rate unchanged at between zero and 0.1 percent.
“The pick-up in Japan’s economic activity has paused, mainly due to the effects of a slowdown in overseas economies and of the appreciation of the yen,” the central bank said after a two-day policy meeting.
“Improvement in business sentiment has slowed on the whole despite steady improvement in domestic demand-oriented sectors,” the bank said in a statement.
Many analysts expect the BoJ to take further easing steps — such as expanding its asset-buying facility — over coming months amid increasing global economic strife, especially in Europe.
Reflecting the global uncertainty and persistent strength of the yen, the bank’s quarterly Tankan survey of sentiment in major Japanese manufacturers plunged in December to “minus four” from positive “two” in September.
In October, the BoJ said it would boost its asset buying fund to 55 trillion yen ($707 billion) from 50 trillion yen to help pour more liquidity into the market, with the extra amount earmarked for the purchase of Japanese government bonds.