MNI 5 THINGS: BOJ Outlook Report Didn't Show 2% CPI Timeframe

     TOKYO (MNI) - The Bank of Japan board slightly revised up its economic

growth projections for fiscal 2018 and 2019, backed by solid global demand and

despite an expected slowdown in domestic demand, according to its quarterly

Outlook Report released after the BOJ's two-day policy meeting that ended

Friday.

     But the board stopped providing its estimate on when the bank can achieve

its inflation target. It noted continued higher downside risks to its inflation

projections compared to upside risks, slightly revising down its forecast for

the core consumer price index (excluding fresh food) for fiscal 2018 and leaving

its estimate for the next fiscal year unchanged at 1.8%, below its 2% inflation

target.

     In its brief monetary policy statement, the BOJ said its board decided

Friday in an 8-to-1 vote to maintain its monetary easing stance under the yield

curve control framework it adopted in September 2016.

     No change in monetary policy was widely expected. The BOJ believes large

monetary stimulus is still needed to guide low inflation around 1% toward its 2%

price stability target.

     The key points from the Outlook Report:

     * The BOJ didn't say when the board believed the central bank could anchor

inflation around 2%. Announcing the timeframe for hitting the target has become

meaningless as it has been pushed back so many times and Japan is still only

halfway toward stable 2% price rises. In the last report issued in January, the

BOJ said the 2% target was expected to be achieved "around fiscal 2019." Until

January, the BOJ had always provided the timeframe for achieving its price

stability target since it began aggressive easing in April 2013.

     * The board's median forecasts for core CPI (excluding fresh food): +1.3%

in fiscal 2018 (+1.4% in January); +1.8% in fiscal 2019 excluding the direct

impact of the sales tax hike planned in October 2019 (+1.8% in January); +1.8%

in fiscal 2020 excluding the effects of the tax change (the first forecast).

     * The board's median forecasts for real GDP: +1.6% in fiscal 2018 (+1.4% in

January); +0.8% in fiscal 2019 (+0.7% in January); +0.8% in fiscal 2020 (the

first forecast).

     * The BOJ board said while risks to economic growth are largely balanced in

fiscal 2018, downside risks are higher than upside risks in fiscal 2019 onward.

     * The board maintained its view that downside risks to inflation are higher

than upside risks throughout its new three-year projection period to March 31,

2021.

     * The BOJ also repeated that the momentum toward achieving the 2% price

target is maintained but that it is not yet sufficiently firm.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

[TOPICS: MAJDS$,MMJBJ$,M$A$$$,M$J$$$,MT$$$$]