Bank of Japan Governor Kazuo Ueda said on Friday the central bank will "patiently" maintain ultra-loose monetary policy as sustained achievement of its 2% inflation target is not yet in sight.

Ueda said Japan's economy was recovering moderately with consumption and capital expenditure continuing to increase.

However, the BOJ does not have enough conviction yet that inflation will sustainably and stably achieve its 2% target, he said.

"Trend inflation is likely to gradually accelerate toward our 2% inflation target through fiscal 2025. But this needs to be accompanied by a positive wage-inflation cycle. Uncertainty on whether Japan will see such positive wage-inflation cycle is high," he told parliament.

With inflation exceeding the BOJ's 2% target for more than a year, the central bank is under pressure to phase out its massive stimulus programme that is blamed for causing persistent yen falls and pushing up the cost of imports.

But Japan's economy contracted in July-September, snapping two straight quarters of expansion on soft consumption and exports, complicating the central bank's efforts to gradually phase out its stimulus.

Source : Reuters