TOKYO (AP) – Japan’s central bank opted Friday for a modest expansion of its lavish monetary stimulus to help perk up sluggish growth and combat deflation.
The Bank of Japan ended a policy meeting Friday by announcing it will expand purchases of assets from financial institutions to help inject more cash into the world’s third-largest economy and pursue its 2 percent inflation target.
But the measures fell short of expectations among many investors for more aggressive action. Ahead of the meeting, speculation had mounted over the possibility for a so-called “helicopter money” approach that would entail more direct infusions of money into the economy.
Recently, the government downgraded its growth forecast for 2016 to 0.9 percent from 1.7 percent.
“With underlying inflation set to moderate further toward the end of the year, we think that the bank will still have to provide more easing before too long,” Marcel Thieliant of Capital Economics said in an analysis. “Overall, today’s decision was a clear disappointment,” he said.