The Bank of Japan (BOJ) pushed back the timing for hitting 2% inflation target and now sees inflation reaching the price target around fiscal 2019, the policy statement showed on Thursday.
Key Points from BOJ’s Quarterly report:
Recent moves in CPI have been relatively weak
Rise in medium to long term inflation expectations has been lagging behind somewhat
Inflation expectations projected to rise as firms gradually raise wages, prices
CPI likely to continue uptrend, increase toward 2 pct
Projected rate of increase in CPI is lower mainly for the first half of 3 year projection period
Risks to economy, prices are skewed to downside
Momentum toward hitting price target is maintained but not yet sufficiently firm
BOJ to make policy adjustments as appropriate with view to maintaining momentum toward achieving price target
Forecasts:
Real GDP seen at:
+1.8 pct in fy2017/18 vs +1.6 pct projected in April
+1.4 pct in fy2018/19 vs +1.3 pct projected in April
+0.7 pct in fy2019/20 vs +0.7 pct projected in April
Japan core CPI slashed to:
+1.1 pct in fy2017/18 vs +1.4 pct projected in April
+1.5 pct in fy2018/19 vs +1.7 pct projected in April
+1.8 pct in fy2019/20 vs +1.9 pct projected in April
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