The Bank of Japan on Tuesday raised its growth forecasts for the current fiscal year as strong overseas demand supports the economy.
Policymakers predicted an expansion of 3.3 percent in the year ending March 31 compared with the 2.1 percent estimated in October, the BOJ said. The bank also held the key interest rate between zero and 0.1 percent and the size of a program to buy securities at ¥5 trillion, by a unanimous vote.
The BOJ's more optimistic view was in line with the government's 3.1 percent expansion forecast, as accelerating growth in the largest overseas markets helped boost output. Still, the risk of a further yen appreciation hurting exports and worsening deflation leaves open the possibility of the BOJ expanding its stimulus steps, HSBC Securities said.