The Bank of Japan opted to keep its ultra-loose monetary regime intact Tuesday but cut its outlook for inflation, saying that stronger growth is not yet doing enough to push wages higher or fire up consumer demand.
TOKYO — The Bank of Japan opted to keep its ultra-loose monetary regime intact Tuesday but cut its outlook for inflation, saying that stronger growth is not yet doing enough to push wages higher or fire up consumer demand.
In this fiscal year, ending next March, the central bank expects the the world’s third-largest economy to expand at a 1.9 percent pace, up slightly from its July forecast. But it expects growth to slow to 1.4 percent in the coming year and to half that pace in fiscal 2019.
The BOJ trimmed its inflation forecast for the current fiscal year, which ends next March, to 0.8 percent from an earlier forecast of 1.1 percent.
Like U. S. Federal Reserve chair Janet Yellen, BOJ Gov. Haruhiko Kuroda is facing the end of his current term and it’s unclear if Prime Minister Shinzo Abe will re-appoint him for another. Kuroda has been the biggest ally of “Abenomics,” with his “big bazooka” of monetary easing through massive purchases of government assets that have injected trillions of dollars into the economy in hopes of spurring price increases.
The latest economic data underscored the challenge the central bank faces in trying to attain its 2 percent inflation target.
