The Bank of Japan, at a rate review next week, will slash its growth and inflation outlook for the fiscal year, but modestly reduce its projections for the following year.
Sources privy to the matter said the central bank, by not straying far from its current projections, can still postulate it remains on course to hit its 2% inflation goal next year without bolstering its massive purchase program.
But critics noted the program has been only slightly effective and disrupts the bond market. Also, Finance Minister Taro Aso expressed doubts additional monetary stimulus would help attain the BOJ’s target.
Sources added the BOJ, contending with inflation, is preparing to reduce its core consumer inflation forecast for this year, which began in April, to below 0.5% in a semi-annual report due October 30.
However, they added the central bank will only cut by 0.1-0.2 point its estimates the price hikes will advance to 1.9% in the following fiscal year, keeping it close to its target.
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