TOKYO (AP) -- Japan's central bank opted Thursday to keep its lavish monetary stimulus intact while downgrading its outlook for inflation.
The Bank of Japan's policy meeting ended Thursday with no change to its injections of trillions of yen (hundreds of billions of dollars) into the economy each year through government bond purchases.
The BOJ said in a statement that it forecasts inflation at 1.1 percent in 2017, below its 2 percent target and also its earlier outlook for a 1.4 percent rise in the consumer price index.
"Inflation expectations have remained in a weakening phase," it said.
But the central bank raised its forecast for growth for the current fiscal year to 1.8 percent from 1.6 percent, citing increased exports and improving profits and business sentiment.
The BOJ's assessment of the economy referred repeatedly to increased spending and investment linked to Tokyo's 2020 Olympic games. But it said much of that boost to growth would dissipate by 2019, as pre-Olympics construction wraps up and a long-delayed sales tax hike is implemented.
BOJ Gov. Haruhiko Kuroda has sought to spur inflation, and encourage businesses and consumers to spend more sooner, through massive asset purchases and a negative interest rate policy.
But while central banks in Europe and the U.S. begin winding back stimulus measures taken to counter the fallout from the global financial crisis, Kuroda has said the BOJ will persist until it can achieve its inflation target — now not expected until 2019.
Trade has helped underpin the recovery, thanks to recovering demand in China and other parts of Asia.
Japan's exports rose nearly 10 percent in June from a year earlier, while imports jumped 15.5 percent due largely to a rise in oil and gas imports, according to customs data also released Thursday.
Exports to China surged 20 percent from a year earlier to 1.25 trillion yen ($11 billion, while exports to the U.S., Japan's biggest single overseas market, climbed 7 percent to 1.3 trillion yen ($11 billion).
The total trade surplus of 439.9 billion yen ($3.9 billion) compared with a 686.5 billion yen surplus in June 2016, down more than a third.