People walk through the favored Ueno shopping district in Tokyo, December 23, 2022.
Richard A. Brooks | afp | Getty Images
The Bank of Japan (BOJ) is considering raising its January inflation forecast to show price growth close to its 2% target for fiscal years 2023 and 2024, the Nikkei reported on Saturday.
The BOJ rocked markets this month by extending the range of 10-year yield caps, which was officially intended to straighten out the bond market disruption, but some analysts saw it as a prelude to an exit from ultra-loose monetary easing.
Improvements to the BOJ’s inflation forecast would fuel such speculation even further, as Governor Haruhiko Kuroda said the central bank could discuss an exit if meeting the two% inflation target paired with wage hikes appears.
Citing people acquainted with the discussions on the central bank, the Nikkei said the proposed changes would see the core consumer price index increase by around 3% in fiscal 2022, between 1.6% and a pair of% in fiscal 2023 and nearly 2% in fiscal yr 2024.
Previous forecasts released in October were around 2.9%, 1.6% and 1.6% respectively.
Japan’s core consumer prices, excluding fresh food, rose 3.7% in November, probably the most since 1981, government data showed last week.
But Kuroda dismissed the prospect for a short-term rate of interest hike, saying recent price increases were due to a one-time increase in raw material costs, not strong demand.
The BOJ will release its latest quarterly growth and price forecasts after its next policy meeting on Jan. 17-18.
Analysts, searching for any clues to a change in monetary policy, are also waiting to see if annual wage negotiations early next yr yield substantial wage increases, or if the top of Kuroda’s 10-year term in April will lead to a policy revision of the 2013 agreement between the BOJ and the federal government.