BoJ dampens easing speculation, says Japan economy improving

TOKYO, May 21 (AFP) : The Bank of Japan on Wednesday doused expectations of more easing measures in coming months, saying the world's number three economy was improving despite concern that a sales tax rise will derail recovery.

Policymakers also dropped the word "deflation" from their post-meeting statement, after unanimously agreeing to keep the central bank's stimulus drive unchanged following a two-day meeting.

The BoJ said its moves to boost laggard growth were taking hold as Japan's economy staged a "moderate recovery" even though consumer spending dropped after sales taxes rose on April 1 -- a rise seen as crucial to cutting the massive national debt.

Last month the BoJ cut its economic growth expectations for the fiscal year to March, which boosted speculation it would expand its monetary easing campaign to counter a tax-driven downturn.