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The Bank of Japan left its overall economic assessment unchanged on Friday but also lowered its assessment on private consumption in the wake of weaker spending caused by the extended state of emergency.

"Japan's economy has picked up as a trend, although it has remained in a severe situation due to the impact of the novel coronavirus at home and abroad," the BOJ said.

"Private consumption has been stagnant due to strong downward pressure on consumption of services, such as eating and drinking as well as accommodations."

The previous view was that "a pick-up in private consumption has paused due to increased downward pressure on consumption of services, such as eating and drinking as well as accommodations."

As for the near-term outlook, the BOJ largely kept to its view saying: "Although the level of Japan's economic activity, mainly in the face-to-face services sector, is expected to be lower than that prior to the pandemic for the time being, the economy is likely to recover."

On inflation, the BOJ said that "inflation expectations have been more or less unchanged."