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Bank of Japan raises growth outlook, keeps policy steady

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Investing.com - The Bank of Japan raised its economic growth forecasts, but kept its policy stance unchanged, as was widely expected on Tuesday in its latest policy review.

The central bank raised its gross domestic product (GDP) forecast to 1.4% for the fiscal year ending March 31, from its previous forecast made in October of 1.0% growth.

The BoJ said it expects inflation to rise to around its target of 2% around fiscal 2018. It cited signs that medium-to-long term inflation expectations have stopped declining and were showing some indications of rising with wages picking up.

For the current fiscal year, it expected the consumer price index (CPI) excluding fresh food, its preferred indicator, would fall 0.2%, compared with its October forecast for a 0.1% fall, but in fiscal 2017, the BoJ expected inflation of 1.5%.

The decision followed some signs of improvement in the economy, but was likely tempered by uncertainty as the U.S., one of Japan's key trading partners, has abandoned plans to sign the Trans-Pacific Partnership trade pact, an agreement the country's political leadership saw as key to economic reforms.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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