TOKYO, Oct 31 (AFP): Japan's central bank revised down inflation forecasts again on Wednesday, in the latest sign that it has made little headway towards its 2.0 per cent target despite years of massive monetary easing.
The Bank of Japan (BoJ) left that easing programmeme in place, as expected, and slightly lowered the inflation forecast for the fiscal year ending March 2019 to 0.9 per cent from 1.1 per cent.
The revision, in a quarterly report issued after a two-day meeting of the central bank, comes after it earlier this year dropped a 2020 target for the long-standing 2.0 per cent goal.
"The momentum toward achieving the price stability target of 2.0 per cent is maintained but is not yet sufficiently firm," the BoJ said in the report.
It also revised down forecasts for the coming years, projecting a 1.4 per cent rate for fiscal 2019 and 1.5 per cent for fiscal 2020.
Those figures don't factor in the effects of a consumption tax hike expected to go into effect around October 2019.
The BoJ has struggled for years to reach the 2.0 inflation rate thought necessary to turbocharge Japan's economy, and has defended its decision to maintain its monetary easing even as other central banks tighten policy.
It blames a "deflation mindset" caused by consumers and employers used to long periods of low growth and deflation.
In its report it said companies remained "cautious" when setting prices and wages, with households similarly careful on spending. The bank has been criticised for the consequences of its policy, including concerns that its massive purchases are skewing the bond market and financial markets.
BoJ lowers inflation forecasts again
FE Team | Published: October 31, 2018 23:48:42
BoJ lowers inflation forecasts again
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