The Bank of Japan said Wednesday the country’s consumer prices will likely rise around 2 percent in fiscal 2015 and fiscal 2016, maintaining its target for achieving 2 percent inflation in about two years after embarking on large-scale monetary easing in April last year.
The central bank said core consumer prices, excluding fresh food, will likely increase 1.9 percent in fiscal 2015 and 2.1 percent for fiscal 2016, without taking into account the impact of the planned two-stage consumption tax hike that began on April 1, the BOJ said in its semiannual outlook report.
The central bank revised downward its growth outlook for the domestic economy in fiscal 2014 to an expansion of 1.1 percent in terms of real gross domestic product, from a rise of 1.4 percent projected in January, citing “a delay in export recovery.” The BOJ expects the economy to grow 1.5 percent in fiscal 2015 and 1.3 percent in fiscal 2016.
The outlook report for fiscal 2013 as well as the next three years through fiscal 2016 was released after the nine-member Policy Board decided to maintain the BOJ’s current ultraeasy monetary policy to conquer deflation, judging the domestic economy is on track to achieve the 2 percent inflation target.
The BOJ is “on a steady course” but still “halfway” to attaining the inflation target, BOJ Governor Haruhiko Kuroda told a news conference in Tokyo after the one-day policy meeting.
“We will make adjustments if necessary” after assessing both upside and downside risks, especially overseas factors, he said, indicating he has become more cautious about the prospects for the economy. After the last policy meeting in early April, Kuroda said he saw no need to immediately alter the BOJ’s policy.
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