TOKYO • Japan's central bank yesterday held its fire on expanding its monetary easing programme, even as the world's third-largest economy slipped into its second recession in two years and monthly exports fell.

Prime Minister Shinzo Abe has been trying since late 2012 to revitalise Japan's economy through his signature "Abenomics" policies, with aggressive monetary easing by the Bank of Japan (BoJ) at its foundation.

Some analysts feel the BoJ will be forced to expand its massive 80 trillion yen (S$923 billion) annual asset-buying scheme, launched over two years ago to kickstart growth and end deflation.

But the BoJ opted to do nothing at the end of its two-day policy meeting, as it did last month - when expectations were even higher it would take action.

"While the Bank of Japan literally ignored the renewed fall in (the third-quarter gross domestic product) in today's statement, we think that a likely moderation in underlying inflation will eventually force policymakers to introduce more stimulus," Mr Marcel Thieliant, Japan economist at Capital Economics, said in a statement.

BoJ governor Haruhiko Kuroda told a news conference that the economy is better than the figures suggest. He was asked about his views on the consecutive declines in GDP growth - the technical definition of a recession.

Consumer spending is "resilient" and exports broadly positive, meaning that "final demand as a whole is rising", he said. "This is in line with the evaluation that Japan's economy is on a gradual recovery path."

And in data released yesterday, Japan's Finance Ministry announced that exports declined in October for the first time in over a year.

AGENCE FRANCE-PRESSE