Japan's economy is expected to continue recovering moderately, the Bank of Japan said in its monthly report on Friday.
The bank reiterated that exports and industrial production are set to remain more or less flat for the time being, but after that, they are likely to increase moderately.
The finance ministry data yesterday showed that exports declined for the first time in more than a year in October largely due to weak demand from China.
Public investment is expected to continue its moderate declining trend, albeit maintaining a somewhat high level, the bank said.
The economy entered a technical recession in the third quarter largely due to weak corporate investment. Business investment had declined 5 percent, subtracting 0.2 percentage point from growth.
The central bank yesterday maintained its target of raising the monetary base at an annual pace of about JPY 80 trillion.
Policymakers turned cautious about inflation expectations. Inflation expectations appear to be rising on the whole from a somewhat longer-term perspective, although some indicators have recently shown relatively weak developments, the bank said.
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