People walk the favored shopping area of Ueno in Tokyo on December 23, 2022.
Richard A. Brooks | Afp | Getty Images
The Bank of Japan (BOJ) is considering raising its inflation forecasts in January to point out price growth near its 2% goal in fiscal 2023 and 2024, Nikkei reported on Saturday.
The BOJ jolted markets this month by widening its 10-year yield cap range, a move officially aimed toward straightening out bond market distortions but seen by some analysts as a prelude to the exit from its ultra-loose monetary easing.
Upgrades to the BOJ’s inflation forecast would further fuel such speculation as Governor Haruhiko Kuroda has said the central bank could discuss the exit if achievement of its 2% inflation goal in tandem with wage hikes comes into sight.
Citing people aware of discussions on the central bank, Nikkei said the proposed changes would show the core consumer price index rising around 3% in fiscal 2022, between 1.6% and a couple of% in fiscal 2023, and nearly 2% in fiscal 2024.
The previous forecasts released in October were around 2.9%, 1.6% and 1.6%, respectively.
Japan’s core consumer prices excluding fresh food items rose 3.7% in November, the best since 1981, government data showed last week.
But Kuroda has dismissed the prospect of a near-term rate of interest hike, saying recent price rises were driven by one-off increases in raw material costs fairly than strong demand.
The BOJ will release the most recent quarterly growth and price outlook after its next policy meeting on Jan. 17-18.
Analysts, looking for any clues on a monetary policy shift, are also waiting to see if annual wage negotiations early next 12 months will bring substantial pay hikes, or if the tip of Kuroda’s 10-year tenure in April results in any revision to a 2013 policy accord between the BOJ and the federal government.