BoJ slashes annual inflation forecasts

TOKYO: The Bank of Japan yesterday slashed its annual inflation forecast and once again delayed its timetable for hitting a two per cent target as the economy struggles to gain traction despite years of stimulus.

Central bankers also decided to maintain the BoJ’s ultra-loose monetary policy at a time when their counterparts in other major economies from the Americas to Europe consider tightening their belts.

The bank said it now expects the core price index (CPI) to rise 1.1 per cent in the year to March, down from its April estimate of 1.4 per cent, while its March 2019 prediction was lowered to 1.5 per cent from 1.7 per cent previously stated.

In a post-meeting statement it also said it now expects to achieve the two per cent objective sometime in the year to March 2020 – five years after its initial target.

“The timing of the year-on-year rate of change in the CPI reaching around two per cent will likely be around fiscal 2019,” the Bank said in a statement after its latest policy meeting.

“Excluding the effects of energy prices, the recent developments in the CPI have been relatively weak,” it said.

However, it did lift its economic growth outlook to 1.8 per cent for the current fiscal year from its previous estimate of 1.6 per cent.

It also hiked its fiscal 2018 outlook by 0.1 per centage point to 1.4 per cent. — AFP