BOJ Seen Raising Inflation Forecasts for FY 2022-2024

Jiji Press

12:58 JST, January 5, 2023

Tokyo, Jan. 4 (Jiji Press)—The Bank of Japan is expected to revise up its inflation forecasts for fiscal 2022 to fiscal 2024 in a quarterly report to be adopted at its monetary policy meeting Jan. 17-18.

The changes are expected amid spreading moves to pass on higher materials costs to prices, including the unabated wave of food price hikes.

In its latest Outlook for Economic Activity and Prices report, released in October last year, the BOJ’s growth projection for Japan’s core consumer price index, excluding fresh food prices, stood at 2.9 pct for fiscal 2022 through March this year, 1.6 pct for fiscal 2023 and 1.6 pct for fiscal 2024.

The central bank will likely consider small upward revisions to its core CPI forecasts for fiscal 2022 and fiscal 2023. A bigger upward revision will be discussed for fiscal 2024 as the government’s subsidy to reduce household burdens from soaring electricity bills are expected to end.

With price-related data liable to change depending on the effects of government measures tackling soaring prices, some within the BOJ say that the central bank can understand the country’s inflation trends more accurately by counting out energy-related prices.