FXStreet (Delhi) - Yujiro Goto, Research Analyst at Nomura, notes that the BoJ’s semi-annual outlook report downgraded economic and inflation forecast for FY2015-16 as expected, even though the BOJ kept the inflation forecast for FY2017 unchanged at +1.8%.
Key Quotes
“The Bank also now expects inflation to reach 2% around H2 FY2016, pushing even further back from H1 FY2016, while the Bank continues highlighting that the timing for achieving 2% inflation depends on oil price movements.”
“These changes were largely expected via recent media reports, while the CPI inflation forecasts (+0.1% for FY15 and +1.4% for FY16) are weaker than our economists anticipated (+0.3% for FY15 and +1.6% for FY16). The FY15 CPI forecast is now lower than consensus (+0.17%), while FY16 and FY17 forecasts remain more optimistic than consensus (+1.01% and +1.21% respectively).”
“The Bank's FY15 GDP growth forecast is still slightly more optimistic than the consensus forecast too. The outlook report also points out that risks are skewed to the downside for both inflation and the economy, while the Bank's view on wages also sounds a bit more cautious, as reported by media such as Asahi.”
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