The Bank of Japan is likely to revise its outlook for consumer prices (core CPI, excluding fresh food) for fiscal 2023 upward to the 2% range at its monetary policy meeting to be held this month. The rate for fiscal 2024 will not change much from the current 2%, and there is a possibility that a slight reduction will be considered. This was confirmed through interviews with several people familiar with the matter.
Stronger-than-expected momentum in price pass-through by companies is a key factor in the BOJ’s consideration of raising its forecast for fiscal 2023 from the current 1.8%, according to people familiar with the matter. If the upward swing increases, it is likely that there will be a rebound in FY2024, and a downward revision is also in sight.
Bank of Japan likely to maintain large-scale easing at June meeting, prices outperform
According to people familiar with the matter, the BOJ makes decisions on the latest economic and price forecasts and monetary policy management after ascertaining economic indicators and market trends as closely as possible. Outlook for Economic Activity and Prices Incorporating New Outlook (outlook report.
Bloomberg reported last month that it could raise its inflation outlook for fiscal 2023. In a Bloomberg survey this month, private research institutes forecast 2.6%, well above the Bank of Japan’s forecast. Speculation is growing in the market that policy revisions will be made to increase the sustainability of the current monetary easing.
Governor Kazuo Ueda said last month at the European Central Bank (ECB) forum in Sintra, Portugal, that if there is confidence in inflation in 2024, “it could be a good reason to change policy.” In response to this remark, the market is paying attention to the outlook for fiscal 2024 indicated by the Bank of Japan in its outlook report in July.
Bank of Japan Outlook for Consumer Prices
FY2023: Up 1.8% FY2024: Up 2.0% FY2025: Up 1.6%
2023-07-14 09:20:02
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