The Bank of Japan removed a forecast date for 2% inflation in April. According to analysts, the unexpected regulator’s decision was aimed to keep stimulus expectations under control.
The latest forecast suggested inflation will be 1.8% in 2019 and 2020 fiscal years. That is, it is set to be below the target for another three years. Eight of the nine members of the Board of Governors said that there were downside risks to the inflation forecast for 2020.
This means that the Bank of Japan can maintain the current policy for many years if the inflation target is not reached.
Consumer inflation has finally approached 1%, but the economy lacks the momentum to push prices further.
The Bank of Japan has reiterated that it is in no hurry to tighten monetary policy like other central banks. Meanwhile, some representatives of Japan’s central bank urged that there are negative consequences of ultra-soft monetary policy, such as a blow to banks’ profits from almost zero rates.
