OREANDA-NEWS. February 19, 2015. The Bank of Japan on Wednesday held off fresh stimulus, even as weak growth figures this week aggravate concerns about the strength of a recovery in the world's number three economy.

Policymakers said Japan was seeing a "moderate recovery trend", after wrapping up a two-day meeting, but they further cut back on their inflation expectations, in a sign that their price targets look increasingly out of reach.

The central bank's decision to keep its already massive stimulus unchanged was widely expected, but analysts have said weak growth figures may force its hand later this year.

On Monday, official data showed the economy limped out of recession in the last quarter of 2014, with a weaker-than-expected 0.6 percent expansion between October and December.

That followed two consecutive quarters of contraction that came as an April sales tax rise hammered consumer spending.

However, economists had expected a stronger 0.9 percent expansion on-quarter, while over the full year the preliminary data showed zero growth, compared with 1.6 percent in 2013.

"As was widely expected, the Bank of Japan left policy settings unchanged at today's meeting," said Marcel Thieliant from Capital Economics.

"Board members upgraded their assessment of industrial production and exports, which they now see picking up. But they also acknowledged the disappointing Q4 GDP data released on Monday by noting that the recovery in private consumption has been sluggish in some areas."

He added: "The BoJ does not seem to be fully convinced over the strength of the economic recovery, and we still think that policymakers will announce more stimulus in late April."

BoJ governor Haruhiko Kuroda insisted that, while the BoJ remains ready to expand its asset-buying plan, now was not the time to act.

"I don't believe we have to think about additional stimulus right now," he told reporters in Tokyo.

"But our commitment to adjust monetary policy without hesitation remains unchanged" if necessary.

- Surprise stimulus -

The BoJ surprised markets in October when it announced an expansion of its huge asset-buying programme -- similar to the Fed's now wound-up quantitative easing plan.

Since then, the European Central Bank and several other major central banks have eased monetary policy.

The BoJ's unprecedented scheme pumps cash into the banking system at a rate of about 80 trillion yen (\\$679 billion) a year, which it intends to grease the wheels of the economy.

Last month, the bank slashed its inflation outlook as plunging oil prices dent efforts to slay years of deflation, although policymakers still boosted their growth forecasts and said the economy was rebounding.

On Wednesday, the its post-meeting statement said inflation, excluding the effects of the tax hike, was hovering around 0.5 percent, down from an earlier range of 0.5-1.0 percent that the bank used last month.

The price downgrades underscore how reaching its 2.0 percent inflation target by early next year looks unlikely.

The BoJ's inflation target is a cornerstone of Tokyo's wider bid to turn around years of tepid growth by generating price rises and prompting firms to boost their hiring and expansion plans.