Bank of Japan officials meeting this week will probably consider a sharp increase to their inflation forecast for this fiscal year, while also discussing concerns about whether the upward trajectory is sustainable, according to people familiar with the matter.
The central bank’s policy board is likely to mull raising the consumer inflation projection to around 2.5% for the year ending in March, up from 1.8% in the April estimate, according to the people. They expect projections for the following fiscal years to be largely unchanged to reflect a lack of confidence the bank can achieve its 2% inflation goal in a stable manner, the people said.
The BOJ will release its quarterly economic report together with a policy statement at the Friday conclusion of the two-day policy board meeting.
In updating the bank’s Outlook Report, the board will probably discuss upgrading their economic assessment for the first time in a year, potentially characterizing the economy as in recovery, the people said. That would bring the BOJ’s assessment in line with the government’s.
