TOKYO: The Bank of Japan (BoJ) may trim its economic growth forecast for the current year next week, sources familiar with its thinking said, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April.
But the central bank will roughly maintain its upbeat price projections and stick to its view that the world’s third-largest economy will continue a moderate recovery as the pain from the tax hike heals, the sources said on condition of anonymity.
With no major change in the broad economic outlook, the BoJ is set to maintain its policy framework, under which it has pledged to increase base money by 60-70 trillion yen (RM1.87 trillion-RM2.18 trillion) per year via aggressive asset purchases. The decision is expected at the end of a two-day meeting on July 15.
“The economic contraction in April-June appears to be bigger than expected, so it won’t be surprising if the BoJ cuts its growth projection,” said Junko Nishioka, chief Japan economist at RBS Securities. Reuters
