Reuters reports, citing sources familiar with the matter
- BOJ to predict inflation falling short of 2% through fiscal year 2021
- BOJ likely to project inflation to move above 1.5% in fiscal year 2021
- BOJ may slightly cut economic growth, inflation forecasts for fiscal year 2019
For some context, the BOJ will be releasing its updated economic forecasts next week when members meet for their monetary policy meeting on 25 April. It would represent the first time they pencil in a fiscal year 2021 forecast but the fact that it falls below the 2% target is not surprising to say the least.
The struggle for inflation is real in Japan and even for me, the 1.5% forecast is a tad optimistic. Core inflation in Japan is still closer to 0% than it is to 2% and there doesn't seem to be any real signs of it picking up despite a tight labour market.
The slight downgrades for the current fiscal year may weigh a little on the yen upon release/confirmation. But overall, it's not really the most surprising thing either given the signs we've seen in the Japanese economy during the last quarter.
