TOKYO: Bank of Japan (BoJ) officials meeting this week will probably consider a sharp increase to their inflation forecast for this fiscal year, while also discussing concerns about whether the upward trajectory is sustainable, according to people familiar with the matter.
The central bank’s policy board is likely to mull raising the consumer inflation projection to around 2.5% for the year ending in March, up from 1.8% in the April estimate, according to the people.
They expect projections for the following fiscal years to be largely unchanged to reflect a lack of confidence the bank can achieve its 2% inflation goal in a stable manner, the people said.
The BoJ will release its quarterly economic report together with a policy statement at the Friday conclusion of the two-day policy board meeting.
Economists surveyed by Bloomberg widely expect the central bank to keep its policy settings steady at that meeting.
A minority predicts the BoJ will tweak the yield curve control mechanism, although some people close to the bank have said officials don’t see an urgent need to make changes at this point. — Bloomberg