TOKYO (Reuters) – The Bank of Japan is likely to cut its inflation forecasts for this fiscal year and the year to March 2020 at a meeting later this month with price pressures remaining stubbornly weak, people with direct knowledge of the bank’s thinking said.
More than five years after Governor Haruhiko Kuroda embarked on a massive easing policy aimed at stoking 2 percent inflation, the BOJ will likely cut its projection for core consumer prices for this fiscal year to around 1.0 percent from April’s 1.3 percent projection, and for next year to around 1.5 percent from 1.8 percent, the three sources told Reuters.
They spoke on condition of anonymity as the discussions are private.
The central bank will scrutinise structural factors behind the weakness in consumer prices when it conducts a quarterly review of its long-term growth and price projections, sources have said.
The core consumer price index, which includes oil products but excludes volatile fresh food prices, rose 0.7 percent in May from a year earlier, the same rate as April and far below the BOJ’s target of 2 percent.
(Reporting by Sumio Ito and Takashi Umekawa; Writing by Kaori Kaneko; Editing by Sam Holmes)