TOKYO (Reuters) – The Bank of Japan (BOJ) will raise its inflation forecast for this fiscal 12 months to above 2.5% at its next policy meeting as a weakening yen and better raw material costs drive up prices, the Kyodo news agency cited sources as saying on Monday.
While the upgrade will bring inflation more firmly above the central bank’s 2% goal, the BOJ policy board was prone to keep ultra-loose monetary policy in place to support Japan’s economy, Kyodo said.
In quarterly projections resulting from be released on the conclusion of the Oct. 27-28 policy-setting meeting, the BOJ would likely increase its core consumer inflation forecast for the fiscal 12 months through March 2023 to above 2.5% from the present estimate of a 2.3% rise, Kyodo reported.
While consumer inflation has exceeded the BOJ’s 2% goal, central bank Governor Haruhiko Kuroda has characterised recent inflation as being cost-push, emphasising it have to be accompanied by stronger wage growth to contemplate altering the ultra-easy policy.
Consumer inflation is anticipated to fall in need of the central bank’s goal in the following fiscal 12 months, Kuroda told parliament on Monday.
(Reporting by Mariko Katsumura and Daniel Leussink; Editing by Chang-Ran Kim, Robert Birsel)
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