BOJ ups GDP forecasts, inflation forecasts cut

Following the BOJ’s unchanged monetary policy stance, the release of the central bank’s ‘Outlook for Economic Activity and Prices’ report highlights (via Reuters):

Risks to economy roughly balanced

Downside risks to prices are large

Household inflation expectations pose both upside, downside risks to prices

Still uncertainty about movements in overseas economies

Momentum towards 2% price target is intact but still lacks strength

BOJ's median real GDP forecasts raised:

For fiscal 2017/18 at +1.9 pct vs +1.8 pct projected in July

For fiscal 2018/19 at +1.4 pct vs +1.4 pct projected in July

For fiscal 2019/20 at +0.7 pct vs +0.7 pct projected in July

Inflation forecasts trimmed:

Core CPI expected +0.8 pct in fy2017/18 vs +1.1 pct projected in July

Core CPI expected +1.4 pct in fy2018/19 vs +1.5 pct projected in July

Core CPI expected +1.8 pct in fy2019/20 vs +1.8 pct projected in July