TOKYO (AFP) ― The Bank of Japan on Wednesday said its monetary easing blitz was winning the war on deflation as it held off announcing any fresh measures to stimulate the economy.

The unanimous decision after a two-day policy meeting was widely expected with analysts predicting the BOJ would launch an expansion of its asset-buying plan later this year to counter the effects of an April sales tax hike.

While the increase is seen as crucial to chopping Japan’s eye-watering national debt ― proportionately the worst among rich nations ― there are fears it will derail its economic recovery.

The BOJ kept its forecast for the long-sluggish economy to expand about 2.7 percent in the year to March, saying it “continued to recover moderately,” while it also stuck with its 2.0 percent inflation target.

The BOJ’s monetary policy “will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan’s economy to overcome the deflation that has lasted for nearly 15 years,” it said in a statement.

BOJ Gov. Haruhiko Kuroda is to hold a regular press briefing Wednesday afternoon.

Kuroda unveiled the BOJ’s vast asset-buying scheme in April as part of a broader plan by Prime Minister Shinzo Abe to reinvigorate the economy and eradicate years of deflation with a policy blitz, dubbed Abenomics.

Reversing years of falling prices is a key goal of the BOJ’s plan and the inflation target is seen as crucial, although some analysts are growing increasingly skeptical of the bank’s ambitious timeline.

“Our view remains that, barring some major economic or market shock, the Bank of Japan is likely to wait until the second half of this year before announcing any further monetary stimulus,” London-based Capital Economics said ahead of the BOJ’s meeting.

“This would allow the board to gauge how the economy has weathered this April’s consumption tax hike.”

Capital Economics added that it expected the BOJ to ultimately push back its inflation target by about one year.

“We have therefore penciled in October for the timing of any official acknowledgement that the original two-year deadline will be missed,” it said.

“This would probably be accompanied by the announcement of additional monetary easing.”

In forex trading, the yen got a boost from the decision to hold off further stimulus, with the dollar weakening to 104.04 yen, from 104.28 yen shortly before the BOJ announcement.

Despite Abe’s much-lauded start since sweeping national elections in late 2012, analysts have warned that Tokyo’s bold pro-growth program ― a mix of big government spending and central bank monetary easing ― is not enough on its own without promised economic reforms.

Japan’s growth slowed markedly in the July-September quarter ― after leading G7 nations in the first half of the year ― as exports weakened and consumer spending slowed.

More positively, a BOJ report last month said Japanese business confidence had soared to a six-year high, while November figures showed a key inflation indicator rising at its fastest pace since the late 1990s as Japan sank into years of deflation.

But rising prices have largely been driven up by higher fuel bills after the Fukushima atomic crisis, not surging demand for everyday goods such as vacuum cleaners and clothes which power the economy as a whole.

Since the accident, Japan has been importing fossil fuels to plug the energy gap, a pricey option that has become even more expensive as the yen sharply weakened in the wake of the BOJ’s monetary easing drive.

While deflation may sound like a good thing for shoppers, it can be bad for growth because falling prices encourage consumers to put off spending, knowing they will pay less for a product if they wait.

That makes it difficult for companies to invest and discourages them from raising wages, which, in turn, reduces consumer spending further.