The economy is breaking out of its brief stagnant period and heading back toward recovery, with strength in the corporate sector spilling over to the household sector, Bank of Japan Gov. Toshihiko Fukui said Wednesday.
"I can't say the economy has already finished the pause, but we can judge that it is getting out of that situation," Fukui told a regularly scheduled news conference.
His comments come in the wake of a recent series of positive data, including the BOJ's quarterly "tankan" business sentiment survey.
Also, in its monthly report of recent developments, the BOJ said Wednesday that the economy continues to recover, albeit with adjustments in sectors related to information technology.
The central bank said exports -- the main driver of recent economic growth -- slowed a bit, but recent strong domestic demand is offsetting any negative effect.
Asked about ramifications from the recent terror bombings in London on financial systems, Fukui said the reverberations were negligible because there was little direct impact on the financial infrastructure, including the Bank of England and the London Stock Exchange.
He said the BOJ is paying close attention to maintaining Japan's settlement system in the event of terrorist attacks or natural disasters here.
After its two-day regular meeting ended, the BOJ Policy Board left its ultraloose monetary policy untouched and decided to continue allowing financial market liquidity to fall briefly below its target range.