Bloomberg The Bank of Japan refrained from increasing its monetary stimulus even as it trimmed its inflation outlook, as officials count on the economy pulling out a soft patch and consumer price gains accelerating toward its target. by Toru Fujioka and Masahiro Hidaka
'The central bank will continue to expand the monetary base at an annual pace of 80 trillion yen ($648 billion), it said in a statement
on Wednesday in Tokyo. It cut its inflation outlook for the fiscal year
through March 2016 to 0.7 percent from 0.8 percent and forecast 1.9
percent for the next fiscal year.
'While the BOJ’s 2 percent goal remains distant, officials
are looking beyond disappointing output and export data and see a tight
labor market and wage gains as signs of improvement, people familiar
with the discussions said earlier this month. A majority of economists
surveyed by Bloomberg doubt that inflation will pick up as the BOJ
forecasts and predict another boost in stimulus.
'“The BOJ will shrug off the downward revisions in prices and growth
by emphasizing improvement in wages and labor market,” said Daiju Aoki,
an economist at UBS Group AG. “But it’s just so noticeable from their
forecasts that things aren’t going as the BOJ hopes. These revisions are
a sign the economic situation is getting tougher.”'