BOJ Quarterly Outlook: Japan’s GDP forecasts revised up, CPI projections lowered


Reuters reports the key headlines from the Bank of Japan’s (BOJ) quarterly economic outlook report.

Japan's economy to continue expanding moderately as a trend.

Japan's economy likely to face impact of global slowdown for time being, though effect on domestic demand to be limited.

Inflation to gradually accelerate toward 2%.

Risks are skewed toward downside for economy, prices.

Japan's economy sustaining momentum for hitting 2% inflation, but momentum lacking strength.

Japan's economy expanding moderately as a trend, though overseas slowdown, natural disasters affecting exports, output, business sentiment.

Consumer inflation hovering around 0.5%.

Inflation expectations are moving sideways.

Downside risks regarding overseas economies remain high.

No sign so far of excessively bullish expectations in asset markets, financial institutions' activities.

Prolonged downward pressure on financial institutions' profits from low rates could destabilize financial system.

Risk of financial system destabilising not big for now as financial institutions have sufficient capital bases.

Median core CPI forecast for fiscal 2019/20 at +0.6% vs +0.7% projected previously.

Median core CPI forecast for fiscal 2020/21 at +1.0% vs +1.1% projected previously.

Median core CPI forecast for fiscal 2021/22 at +1.4% vs +1.5% projected previously.

Median real GDP forecast for fiscal 2019/20 at 0.8% vs +0.6% previously projected.

Median real GDP forecast for fiscal 2020/21 at 0.8% vs +0.7% previously projected.

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