The Bank of Japan (BoJ) chose to keep interest rates on hold today, with rate tightening appearing a long way off.
Nevertheless, one of the central bank´s committee members voted for looser monetary policy.
While maintaining interest rates at an ultra-low 0.1%, the BoJ continued to sound upbeat on the outlook for the Japanese economy.
It claims ongoing economic recovery will eventually see inflation reach its 2% target without the need for further stimulus measures.
However, new board member Goshi Kataoko dissented in the belief that more stimulus would be required to meet the inflation target.
Japan´s core consumer price inflation is currently well behind the BoJ´s inflation target, having risen to 0.5% in July versus 0.4% in June.
Inflation remains stubbornly low, despite the Japanese labour market being at its tightest level since 1974.
Second-quarter economic growth came in at 2.5%, downwardly revised from an earlier 4% annualised estimate but markedly better than the 1% pace registered for the first three months of the year.
In a statement, the BoJ pointed to the positive trend in Japanese exports as underpinning the nation´s ongoing economic expansion.
Economists, however, remain sceptical of the BoJ´s claims that it is on course to achieve a 1.1% increase in consumer prices for the current fiscal year.
Capital Economics said policy tightening from the BoJ remained “unlikely for the foreseeable future”.
While Capital believes inflation is likely to fall short of the BoJ´s target, it views the Japanese economy as being on course to hit the central bank´s 1.8% growth forecast for this fiscal year.
Along with maintaining interest rates at 0.1%, the BoJ keeps Japanese 10-year bond yields capped at 0% and continues annual asset purchases of around ¥80trn.