MNI: BOJ Sees FY25 Core CPI +1.6%; FY24 +2.0%

The Bank of Japan board believes a 2% price target will not be achieved out to March 2026, which suggests the Bank will need to maintain the current easy policy for the next 12 months at least.

But the expected core CPI forecast could be revised up in July when policymakers update their medium-term forecast after examining the degree of wage hikes on a macro basis and their impact on consumer prices. The board’s median forecast for core CPI in fiscal 2025 – the first forecast –stood at 1.6% and the media forecast in fiscal 2024 was revised to 2.0% from 1.8% made in January. The median forecast this fiscal year was revised up to 1.8% from January’s 1.6%.

The median forecast for real economic growth this fiscal year was revised down to 1.4% from 1.7% and the growth forecast in fiscal 2024 was revised up to 1.2% from 1.1%. The economic growth forecast in fiscal 2025 was 1.0%.

The BOJ noted economic risk is higher in FY23, but "generally balanced thereafter.” The BOJ tweaked the wording of inflation expectations, noting they have been "more or less unchanged recently after rising.” The previous view was “Inflation expectations have risen.”