TOKYO (AP) - Japan's central bank kept its monetary policy unchanged Friday, betting its already massive level of stimulus is sufficient to revive growth.

TOKYO (AP) Japan's central bank kept its monetary policy unchanged Friday, betting its already massive level of stimulus is sufficient to revive growth.

The decision came despite fresh evidence that the Bank of Japan is making little headway in its unprecedented effort to spur inflation in the world's third largest economy.

Data for September showed the core inflation rate, which excludes volatile food prices, was minus 0.1 percent while household incomes and spending also fell.

Prime Minister Shinzo Abe's economic policies are aimed at getting consumers and businesses to spent more, both by keeping interest rates at record low levels and by fostering expectations that inflation will erode future purchasing power.

The economy contracted at a 1.2 percent annual rate in the April-June quarter and many economists expect it to have again lost ground in July-September.

Central bank asset purchases are injecting tens of billions of dollars of cash into the economy each month. But with inflation still near zero, many economists had expected a "surprise" move by BOJ Gov. Haruhiko Kuroda.

Instead, the central bank issued a short statement saying it was keeping its policies as is, without elaborating. As usual, economist Takahide Kiuchi was the policy board's lone dissenter, advocating a sharp cutback in asset purchases.

Data released earlier this week showed stronger-than-expected manufacturing output in September. That may have alleviated pressure on the BOJ to take further action to spur growth.

But Kuroda, while repeatedly insisting the economy is in the midst of a "moderate recovery," has contended all along that the BOJ has done everything it can to boost growth.

The latest data are typical of the mixed signals that have obscured the actual state of Japan's recovery.

Overall inflation was flat from a year earlier. Household spending fell 0.4 percent in September from a year earlier, while incomes slipped 1.5 percent.

Unemployment remained at 3.4 percent, and there were 1.24 jobs available for each job seeker, the data showed.

Tight labor conditions are expected to force companies to raise wages, in turn causing inflation to rise. But companies have expanded overtime and hired more part-time workers, to avoid significant increases in labor costs. That has hindered efforts to boost inflation.

The plunge in oil prices over the past two years has also sapped any inflationary pressure, though inflation excluding both food and energy costs ticked up in September to 0.9 percent from 0.8 percent in August.

However, monetary easing may not have much impact, since with interest rates already near zero it is unlikely to boost corporate spending or purchases of homes, cars and other durable assets, said Richard Katz of the Oriental Economist.

"In an era of near-zero interest rates, monetary ease loses its normal punch," he wrote in a commentary.


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The story has corrected to show that the Bank of Japan governor is Haruhiko Kuroda.