BOJ Inflation Prediction To Show Limits Of Gov Kuroda's Ultra-Easy Policy

• The Bank of Japan is set to predict for the first time that inflation will remain well short of its 2% target beyond Governor Haruhiko Kuroda's term through early 2023, say sources familiar with its thinking.
• The central bank is also expected to trim this fiscal year's inflation forecast reflecting cuts in cellphone charges, the sources say, underscoring the challenge it faces in eradicating Japan's sticky deflationary mindset.
• Such projections, to be made in fresh quarterly estimates due out next week, would reinforce expectations the BOJ will maintain its massive stimulus for the foreseeable future. While the BOJ may paint a rosier view on the economy due to robust exports, it will warn of the strains on consumption from a recent resurgence in COVID-19 infections, they said.
• The world's third-biggest economy has emerged from last year's pandemic-induced slump on support from exports. But slow vaccine rollouts and renewed curbs to contain the virus cloud the outlook.
• At the two-day rate review ending on April 27, the BOJ is set to maintain its short-term interest rate target at -0.1% and that for long-term rates around 0%.

(Source: Reuters)