Japan's central bank maintains monetary policy while downgrading economic assessment

The bank of Japan (BOJ) on Friday decided to keep its current monetary policy, forgoing fresh monetary easing measures for the time being, while downgrading its inflation and economic projections.

The decision came after government data showed that Japan's consumer prices fell for the second consecutive month in September, with the core consumer price index excluding fresh food declining 0.1 percent from a year earlier.

Although the inflation rate is far below the goal of 2 percent set by the bank, the bank judged that the overall inflation trend is improving, as prices excluding fresh food and energy have risen around 1 percent.

Currently, the central bank buys 80 trillion yen of assets a year to increase the country's base money.

Later in the day, the bank revised downward its economic and inflation projections in a semi-annual report, reducing its real GDP projection for fiscal 2015 and 2016 from 1.7 percent and 1.5 percent to 1.2 percent and 1.4 percent, respectively.

The bank also pushed back the target date of achieving the 2 percent inflation goal to the second half of fiscal 2016 ending March 2017, from the first half of fiscal 2016 as expected earlier, as declining energy prices keep pushing down the nation's core consumer prices to below zero percent.

Expectations of additional monetary easing may still linger as economic recovery pace in Japan is slowing down. Endit