Bank Of Japan Lowers Inflation Forecasts Again

Japan's central bank again revised down its inflation forecasts on Wednesday, a further sign that authorities are losing the battle to boost prices in the world's third-largest economy

Tokyo, (UrduPoint / Pakistan Point News - 23rd Jan, 2019 ) :Japan's central bank again revised down its inflation forecasts on Wednesday, a further sign that authorities are losing the battle to boost prices in the world's third-largest economy.

After a two-day meeting, the Bank of Japan's policy board left its mammoth monetary easing programme in place, as expected, and lowered the inflation forecast for the fiscal year ending March next year to 0.9 percent from 1.4 percent.

BoJ Governor Haruhiko Kuroda said the decision to revise down the forecast was "due primarily to the decline in crude oil prices", but added it would only be temporary.

"It is true that it will take some time for us to achieve the two-percent target," he told reporters, referring to the bank's long-held goal.

"It is our belief that the most appropriate way is to patiently continue the existing monetary easing." The downward revision follows a previous downgrade in late October.

In 2013, the BoJ embarked on a huge bond-buying programme in a bid to stimulate long-dormant prices with the stated aim of hitting the two-percent mark within two years.

But while the plan -- which ran in tandem with Prime Minister Shinzo Abe's big-spending drive to ramp up the economy -- showed early promise, the bank has been forced to delay several times the date for hitting its target.

It has in the past blamed the "deflation mindset" of consumers and employers used to long periods of low growth and falling prices.

While the bank said Japan's economy will likely continue to expand, it added that "the mindset and behaviour based on the assumption that wages and prices will not increase easily have been deeply entrenched".

Officials have pointed to other factors, including cautious wage and price growth from firms, and increased technological progress that has reduced costs and intensified competition.

"It has been taking time to resolve these factors that have been delaying price rises," the bank said.