BANK OF JAPAN CUTS GROWTH, INFLATION PROJECTIONS
The Bank of Japan cut its economic growth and inflation projections for the current fiscal year through March as it maintained its ultra-easy monetary policy to support the pandemic-battered economy, Kyodo news agency reported.
In the latest outlook report, the central bank said it expects the Japanese economy to shrink 5.5 percent in fiscal 2020, against its earlier projection of a 4.7 percent contraction, the Mainichi Shimbun also reported. The consumer price index is expected to fall 0.6 percent, rather than the 0.5 percent drop forecast in July. The BOJ has failed to hit its 2 percent inflation goal for nearly eight years.
The bank decided at a two-day policy meeting to keep short-term interest rates at minus 0.1 percent while guiding long-term rates at around zero percent. The BOJ will continue unlimited buying of government bonds from financial institutions and exchange-traded funds at an annual pace of 12 trillion yen ($115 billion.)
"Japan's economy has picked up with economic activity resuming, although it has remained in a severe situation due to the impact of COVID-19 at home and abroad," the BOJ said in the report. With many countries still trying to curb coronavirus cases, especially in Europe and the United States, the BOJ said vigilance against the pandemic must continue.