30 Apr 2014
BoJ report: Inflation to rise close to 2% by mid-2015
FXStreet (Łodź) - The Bank of Japan released its semi-annual report on Wednesday in which it projected that inflation would rise steadily towards the 2% target, reaching it in the middle of 2015 and staying there for the next two years.
"As the BOJ proceeds with its qualitative and quantitative monetary easing and as actual inflation exceeds 1 percent, medium- to long-term inflation expectations will rise as a trend and gradually converge around its price target of 2 percent," the BoJ said in the report, which was released a few hours after Japan's central bank announced its decision to stay on hold in April.
The BoJ kept it's forecast of CPI reaching 1.3% at the end of this financial year, excluding the effect of the sales tax. In 2015/2016 it saw inflation rising to 1.9%. Nevertheless, should risks arise threatening the inflation target, the BoJ would be ready to “adjust policy as needed.”
The central bank also estimated that Japan's GDP for the financial year 2014/2015 would reach +1.1%, in 2015/2016 it would hit +1.5% and in 2016/2017 would be seen at +1.3%.
The recent decline in demand was attributed to the introduction of the sales tax at the beginning of April and described as a temporary development. But the central bank believes that no additional stimulus will be needed to prop up the economy.
"As the BOJ proceeds with its qualitative and quantitative monetary easing and as actual inflation exceeds 1 percent, medium- to long-term inflation expectations will rise as a trend and gradually converge around its price target of 2 percent," the BoJ said in the report, which was released a few hours after Japan's central bank announced its decision to stay on hold in April.
The BoJ kept it's forecast of CPI reaching 1.3% at the end of this financial year, excluding the effect of the sales tax. In 2015/2016 it saw inflation rising to 1.9%. Nevertheless, should risks arise threatening the inflation target, the BoJ would be ready to “adjust policy as needed.”
The central bank also estimated that Japan's GDP for the financial year 2014/2015 would reach +1.1%, in 2015/2016 it would hit +1.5% and in 2016/2017 would be seen at +1.3%.
The recent decline in demand was attributed to the introduction of the sales tax at the beginning of April and described as a temporary development. But the central bank believes that no additional stimulus will be needed to prop up the economy.