BoJ leaves monetary policy unchanged, OECD sees divergence in global growth

The Bank of Japan left monetary policy unchanged after its meeting on Thursday. “Japan's economy is starting to recover moderately,” the BoJ said.

A recovering economy would allow tighter fiscal policy as well, and on cue, the Japanese government announced on Thursday spending cuts of 8.0 trillion yen between April 2014 and March 2016.

Recent economic data for Japan, however, have not been impressive, and that trend continued on Thursday.

While bank lending rose 2.3 percent in July from a year earlier, up from a 2.2 percent increase in June, its current account surplus fell to 336.3 billion yen in June from 540.7 billion yen in May.

Also, a report on Thursday based on the economy watchers survey showed that the current conditions index of service sector sentiment fell to 52.3 in July from 53.0 in June. The future conditions index was unchanged at 53.6.

Trade data elsewhere on Thursday, however, were more positive.

In China, exports rose 5.1 percent in July from a year earlier and imports rose 10.9 percent. Both exports and imports had fallen from a year earlier in June.

In Germany, exports rose 0.6 percent in June. However, imports fell 0.8 percent.

The Organisation for Economic Co-operation and Development released its composite leading indicators for June on Thursday. In its report, the OECD said that the indicators point to diverging growth patterns, with moderate improvements in growth in most major OECD countries but stabilising or slowing momentum in large emerging economies.