The confidence Bank of Japan officials are demonstrating in achieving their inflation target is lowering the chances of additional monetary easing this year even as the economy weakens.
Consumer prices, excluding fresh food, will increase 1.9 percent in the fiscal year starting April 1, 2015, and 2.1 percent the next year, according to the median estimates of BOJ board members in a quarterly outlook released yesterday. Governor Haruhiko Kuroda said the timing on hitting the BOJ’s 2 percent goal hasn’t been pushed back at all.
The sureness — in the face of continued declines in base wages, weaker-than-anticipated industrial production and diminished price pressures from energy costs — spurred economists at Itochu Corp. and Societe Generale SA to abandon forecasts for expanded BOJ stimulus this year. The central bank predictions raise the stakes for Kuroda should the economy fail to pick up in the second half of the year.
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