BOJ Expected to Maintain Policy and Forecasts Intact in Next Week’s Meeting

The Bank of Japan will keep its inflation forecasts almost unchanged at a policy meeting next week as the economy has shown resilience despite the negative impact of the consumption tax hike on April 1, sources close to the matter said Wednesday.

The central bank’s Policy Board members expected in April an average 1.3 percent increase in the core consumer price index, which excludes fresh food, for fiscal 2014 ending next March and 1.9 percent gain for fiscal 2015, without the direct effect of the tax hike.

The policymakers are unlikely to change the forecasts significantly when they meet Monday and Tuesday, according to the sources.

They are also expected to keep the bank’s policy steady to boost the economy, continuing to buy massive amounts of Japanese government bonds and other financial assets from banks to provide sufficient money to the economy while pursuing its 2 percent inflation goal.

The BOJ aims to achieve the goal within around two years since the ultraloose monetary policy was introduced in April last year.

In the April projection, the bank also forecast the core CPI would rise 2.1 percent in fiscal 2016.

via Mainichi

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