Members of the Bank of Japan's monetary policy board said that the country's economic recovery continues, although at a delayed pace, minutes from the bank's April 26-27 meeting revealed on Wednesday.
There remains considerable uncertainty in overseas economies, the bank said, and downside risks to Japanese economic activity remain.
"Risk factors (include) developments in
overseas economies; firms' and households' medium-to long-term growth expectations; and fiscal sustainability in the medium to long term," the minutes said.
At the meeting, the BoJ voted to retain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.
It also decided to retain the central bank's target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion.
"With respect to overseas financial markets, U.S. long-term interest rates had declined, due in part to somewhat waning expectations for proactive economic policy management in the United States and concern over increasing geopolitical risks," the minutes said.
The bank raised the GDP growth forecast for this fiscal year to 1.6 percent from 1.5 percent seen in January. The outlook for next year was increased to 1.3 percent from 1.1 percent. For 2019, the bank projected 0.7 percent growth.
Meanwhile, the inflation forecast for this fiscal was lowered to 1.4 percent from 1.5 percent. The projection for next fiscal year was retained at 1.7 percent. The outlook for fiscal 2019 was 2.4 percent and 1.9 percent after excluding the effects of the planned consumption tax hike.
"The year-on-year rate of change in the CPI was likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium-to long-term inflation expectations," the minutes said.
by RTT Staff Writer
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