BOJ will likely raise CPI forecast to above 2.5%

The Yomiuri Shimbun

15:36 JST, October 22, 2022

The Bank of Japan is expected to raise its core inflation forecast to above 2.5% for fiscal 2022 from its current 2.3%, which was projected in July, at the bank’s meeting to be held Thursday and Friday.

The central bank will present its consumer price index, which excludes volatile perishable food items, in its Outlook for Economic Activity and Prices. The forecast will be announced after the Monetary Policy Meeting to be held Thursday and Friday.

The bank is expected to raise its forecast given that the pace of rising prices is faster than in July due to rising resource prices and higher prices of imported goods caused by the depreciating yen.

The bank’s nine policymakers, including the governor and two deputy governors, are to present the median of their CPI projections.

The BOJ is likely to maintain the current large-scale monetary easing policy due to sluggish growth in wages and low economic expansion.

Many of the bank’s Policy Board members expect that the outlook for prices in fiscal 2023 and 2024 will remain unchanged from the July forecast at the 1% level, based on the view that the high growth of resource prices will slow down.