2016.11.0619:45:00UTC+00BoJ Minutes: Economy Continues Moderate Recovery

Members of the Bank of Japan's monetary policy board said that the country's economic recovery was continuing at a satisfactory pace, the minutes from the bank's September 20 and 21 meeting revealed on Monday.

Inflation is trending higher, although it's been slightly weaker in recent months, the bank said - adding that exports and production are likely to remain sluggish in the near term.

Risks to the economic outlook include Britain's withdrawal from the European Union, U.S. monetary policy and the health of the Chinese economy.

"Although global financial markets had regained their calmness for now after the turbulence following the United Kingdom's referendum, there remained high uncertainties, as seen, for example, in the temporary swings in the markets, mainly reflecting speculation about the timing of a hike in the target range for the federal funds rate in the United States," the minutes said.

At the meeting, the bank decided to continue applying a negative interest rate of -0.1 percent to the policy rate balances in current accounts held by financial institutions.

The bank also will control short-term and long-term interest rates as it aims to keep yields on the 10-year Japanese government bond purchases steady.

"The economy was likely to continue to grow, mainly in private demand, led by the firmness in household spending, reflecting accommodative financial conditions, although it was likely to lack momentum in the short run due to the flattening of industrial production against the background of sluggishness in external demand," the minutes said.

The BoJ said it will expand the monetary base until inflation exceeds 2 percent and stays above the target in a stable manner.

Further, the bank abandoned the guideline for the remaining maturity of JGB purchases.

"The bank will continue with "QQE with Yield Curve Control," aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner," the minutes said.

Also on Monday, the central bank said that labor cash earnings in Japan were up 0.2 percent on year in September.

That was in line with expectations following the upwardly revised flat reading in August (originally -0.1 percent).

The bank also said that real cash earnings advanced an annual 0.9 percent, topping forecasts for 0.7 percent and up from the upwardly revised 0.6 percent gain in the previous month (originally 0.5 percent).