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The Bank of Japan Tuesday forecast the core consumer price index, which excludes fresh food, to rise 1.0% in fiscal 2023, meaning Japan cannot hit the 2% target after Governor Haruhiko Kuroda's second five-year term ends on April 8.

The BOJ board lowered the median inflation forecast for this fiscal year to +0.1% from +0.5% made in January due to the expected downward pressure from lower mobile phone charges. The median forecast for fiscal 2022 was raised to +0.8% from January's 0.7%. As for growth, the board raised the median GDP forecast for this fiscal year to +4.0% from January's +3.9%. The GDP forecast for fiscal 2022 was also raised to +2.4% from +1.8%. In its first ever forecast for fiscal 2023, the bank tipped growth at +1.3%.

Despite the third state of emergency, the BOJ board maintained its economic recovery view but slightly lowered its near-term outlook, citing the impact of covid on in-person services. The BOJ also said that aggregate credit relative to the size of the economy has been increasing "at a pace significantly above the past trend" but added that it doesn't seem to show overheating of financial activity.