People walking in a popular shopping district in Ueno, Tokyo on December 23, 2022.
Richard A. Brooks | Afp | Getty Images
The Bank of Japan (BOJ) is considering raising its inflation forecast in January to show price increases closer to its 2% target for fiscal 2023 and 2024, Nikkei reported on Saturday.
The Bank of Japan shook markets this month by extending the 10-year range on yield caps. Officially aimed at correcting distortions in the bond market, some analysts see it as a prelude to a move away from ultra-accommodative monetary policy.
The upward revision to the BOJ’s inflation forecast is likely to continue as Gov. Haruhiko Kuroda said the BOJ could discuss an exit if the 2% inflation target became visible alongside wage hikes. It will fuel even more speculation.
Citing people familiar with the discussions at the central bank, Nikkei said the proposed changes would push the core consumer price index to about 3% in fiscal 2022, from 1.6% to 2% in fiscal 2023, and nearly 2% in fiscal 2024. He said it was shown to rise.
Previous forecasts released in October were about 2.9%, 1.6% and 1.6% respectively.
Japan’s core consumer prices, excluding fresh food, rose 3.7% in November to their highest level since 1981.
But Kuroda dismissed the possibility of a short-term rate hike, saying the recent rise in prices was due to a temporary rise in raw material costs rather than strong demand.
The Bank of Japan is due to release its latest quarterly growth and price outlook after its next policy meeting on January 17-18.
Analysts looking for clues about a shift in monetary policy are looking at whether there will be a significant wage hike at the annual wage talks early next year, or if Mr. Kuroda’s 10-year term ends in April, leading to an increase in 2013 earnings. We are also watching to see if the policy is revised. Agreement between the Bank of Japan and the government.