The Bank of Japan (BOJ) is expected to cut next fiscal year’s economic and price forecasts at a quarterly review in April, sources say, reflecting growing gloom in the bank after its most recent stimulus measures fell on stony ground.
Downgrading its forecasts could heighten pressure for additional easing measures, though there is waning confidence that monetary policy is providing an effective boost to the economy.
The BOJ’s decision to adopt negative interest rates in January failed to boost stock prices or arrest an unwelcome rise in the yen, and the economy remains stagnant despite nearly three years of its pumping between 60 and 80 trillion yen ($530-700 billion) annually into the economy.
While many BOJ officials remain optimistic about domestic demand, some fret that global market turbulence and sluggish emerging market demand are taking a heavier-than-expected toll on exports and factory output.
To reflect weak external demand, BOJ board members may cut their growth and price projections at a quarterly review to be conducted at a critical policy meeting on April 27-28, sources familiar with its thinking said.
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