Bank of Japan predicts recovery for the first time in 30 months

THE JAPANESE central bank has predicted that the country’s economy is now starting to bounce back, suggesting a recovery for the first time since January 2011.

The bank held interest rates at 0.1 per cent yesterday, where they have been since the end of 2008.

The policy board suggested that improvements were being made in line with the predictions they had made in April, when Bank governor Haruhiko Kuroda launched a programme of bond purchases and committed the bank to aim for two per cent inflation.

Policy makers yesterday predicted that two per cent inflation will be reached in 2015, with CPI rising steadily upward over the next two years, noting the rise in some estimates of inflation expectations.

The statement released with the decision on rates said that while manufacturing has not seen much of an improvement, industrial production, exports and business sentiment have been boosted.

Japan and the UK were two of the only countries whose expected growth was upgraded by the IMF earlier this week, while other advanced and emerging economies saw their estimates slashed.