BoJ lifts inflation forecast

Bank of Japan (BoJ) revised its inflation forecast on Tuesday and adjusted its view of price risks, while leaving its monetary easing policy in place in a nod to lingering pandemic uncertainty.

As prices rise swiftly in other economies, Japan's inflation remains relatively feeble, and still far below the long-held two percent target seen as necessary to turbo-charge the world's third largest economy. In a quarterly report on prices and the economy, the central bank said it now forecasts inflation of 1.1 per cent for the fiscal year to March 2023, up from its previous forecast of 0.9 per cent.

It also revised up its forecast for the fiscal year to March 2024 to 1.1 per cent from 1.0 per cent, leaving the projection for the current year unchanged.  "The projected rate of increase in the CPI (consumer price index) for fiscal 2022 is somewhat higher, mainly reflecting a rise in commodity prices and the pass-through of that rise to consumer prices," the central bank said.

It declared  "risks to prices are generally balanced," adjusting its previous assessment of risk as  "skewed to the downside.

"The BoJ revised down its growth forecast for the current fiscal year to 2.8 per cent from the previous 3.4 per cent.