The Bank of Japan maintained its view on Friday that the economy is recovering steadily but used stronger wording for the outlook, saying it expects the economy to expand. "Japan's economy continues to recover steadily," the BOJ said in its May report. On the outlook, it said: "Japan's economy is expected to expand moderately." The BOJ said it expected a positive trend to continue in consumer prices as it saw the output gap -- the gap between aggregate supply and aggregate demand -- turning positive from around zero now. Earlier, the BOJ board decided to stick to its monetary policy of pegging the key overnight lending rate near zero, as widely expected.