Bank of Japan policymakers are in no mood to expand monetary stimulus this week, sources familiar with their thinking say, even as poor data challenges their presumption that economic recovery will boost inflation to its 2 percent target next year.
When BOJ Gov. Haruhiko Kuroda last opened the monetary taps, in October, he was backed by a razor-thin majority on the bank's board, and although subsequent changes have moved the board closer to his policy stance, a repeat looks even less likely now, the sources said.
With inflation and growth still in the doldrums despite the bank's ¥80 trillion ($665 billion) per year asset buying measures, they said the board had grown increasingly concerned about their diminishing policy options and the downsides of the stimulus, such as draining liquidity from the government bond market.
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