The Japanese Cabinet Office release their.....>

JAPAN: The Japanese Cabinet Office release their economic forecasts for fiscal

year 2017 and 2018

* Real GDP - 2017: 1.9% (prev. 1.5%); 2018: 1.8% (prev. 1.4%)

* Nominal GDP - 2017: 2.0% (prev. 2.5%); 2018: 2.5% (prev. 2.5%)

* CPI - 2017: 0.7% (prev. 1.1%); 2018: 1.1% (prev. 1.3%)

* Keep positive assessment of economy that wages will improve and domestic

demand to drive the economic recovery.

- These figures are higher than the forecasts made by the BoJ and most analysts.

Japan has a history of downgrading economic forecasts, these will be updated

mid-year and are expected to be downgraded again.

- Though the economy is undoubtedly on an upward trajectory, CPI is still a

challenge and the deflationary mindset persists. After the government released a

new package of economic policies earlier in December the question remains

whether the potential growth rate can be increased to spur growth and inflation.

The key obstacles are still demographics, most notably a low birthrate, the new

policies include free childcare and education.