TOKYO (AP) — Japan’s central bank has refrained from expanding its ultra-loose monetary policy despite a sales tax hike, saying the economy is recovering moderately.

The Bank of Japan’s policy statement was the first since an April 1 increase in the sales tax, to 8 percent from 5 percent, that is expected to stall growth in coming months as consumers adjust to higher costs.

The BOJ said inflation is likely to remain at about 1.25 percent for some time, below its target of 2 percent.

It said business sentiment is improving and private spending resilient, a year after BOJ Gov. Haruhiko Kuroda announced unprecedentedly huge asset purchases to spur inflation and help Japan’s economy recover from two decades of doldrums.

Kuroda has said the policies will remain for as long as needed.

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