MNI INSIGHT: Weak CPI Undermines BOJ............>

BOJ: MNI INSIGHT: Weak CPI Undermines BOJ Inflation... Expectations Outlook:

Bank of Japan officials are annoyed at the slow improvement in inflation

expectations and believe that how the near-future rise in consumer prices

affects inflation expectations holds the key to whether the BOJ can achieve its

2% consumer price goal sometime in fiscal 2019, MNI understands. If inflation

expectations fail to pick up amid a further rise in consumer prices, it would

increase pressure on BOJ economists to review their previous scenario that

inflation expectations rise smoothly in response to actual consumer prices.

This, in turn, could force the BOJ to change the timing of when it will reach

the 2% CPI goal. The BOJ expects Japan's core consumer price inde, excluding

fresh food but including energy prices to rise to near 1% on year, and core-core

CPI excluding both fresh food and energy items to rise to near 0.5% toward the

end of this year. (MNI - For full story please visit the Main-Wire at

0401BST){JN}