TOKYO (AP) ― Japan’s central bank has opted to keep its ultra-loose monetary policy in place, saying the economy is on track for a “moderate recovery” despite slowing growth in the past quarter.

The Bank of Japan ended a two-day policy meeting without any moves to step up bond purchases aimed at pumping some 60 trillion yen to 70 trillion yen ($600 billion to $700 billion) a year into the world’s third-largest economy.

There had been some speculation that easing might be stepped up after economic growth fell by half to 1.9 percent in July-September.

BOJ members said they believed Japan was progressing toward an inflation target of 2 percent, despite weakness in exports. Some economists question, however, whether higher prices are doing much to spur investment needed to sustain growth in the long term.

“Regarding risks, there remains a high degree of uncertainty concerning Japan’s economy, including prospects for the European debt problem, developments in the emerging and commodity exporting economies and the pace of recovery in the U.S.,” the central bank said in a statement.

It said the monetary easing would continue “as long as it is necessary.”

A recent comment from a BOJ official suggesting the central bank could step up efforts to spur growth helped reassure investors jittery over the potential impact from an eventual reduction in bond purchases by the U.S. Federal Reserve. Minutes of the Fed’s latest policy meeting, released Wednesday, suggested support for reducing its bond purchases if the U.S. job market improves.

News that officials at the European Central Bank may consider a similar bond purchasing program to reinvigorate the region’s lackluster economy has also helped.

Japanese shares have surged to their highest levels in six months, with the benchmark Nikkei 225 stock index closing Thursday up 1.9 percent at 15,365.60, its highest close since May 22.

The monetary easing announced after Abe appointed Haruhiko Kuroda as BOJ governor, replacing Masaaki Shirakawa who was known for his cautious approach, is aimed at vanquishing deflation by doubling Japan’s monetary base through the central bank’s aggressive asset purchases.

The monetary base is duly rising as expected. But most of the inflationary impact from pumping money into the economy has come from rising costs for imports of fuel and industrial inputs as the yen weakens, said Yukio Noguchi, an adviser to the Institute of Financial Studies at Tokyo’s Waseda University.

The stock of cash in circulation has barely increased, as banks park proceeds from sales of government bonds to the BOJ in accounts at the central bank.

“Companies have no demand for borrowing,” he said.

Domestic demand is expected to perk up in coming months as consumers step up purchases of big-ticket items such as cars and appliances and buy new homes ahead of the imposition of a 3 percentage point increase in the national sales tax to 8 percent.

Weaker than expected growth in emerging economies has slowed exports, which fell 0.6 percent in July-September, though that has been offset to some extent by a recovery in auto shipments to the U.S.