Latest news with #OutlookforEconomicActivityandPrices
Asahi Shimbun
01-05-2025
- Business
- Asahi Shimbun
BOJ halves GDP growth estimate under shadow of Trump's tariffs
Bank of Japan Governor Kazuo Ueda speaks at a news conference on May 1. (Jin Nishioka) The Bank of Japan slashed its growth projection for the country by half and kept interest rates unchanged as the economy faces growing uncertainties from U.S. tariffs. In its Outlook for Economic Activity and Prices for April released on May 1, the BOJ said Japan's real gross domestic product is expected to grow at 0.5 percent in fiscal 2025, which started in April, down from 1.1 percent predicted in the previous report for January. The central bank also cut its GDP growth forecast for fiscal 2026 to 0.7 percent, down from 1.0 percent in the January report. The GDP growth forecast for fiscal 2027, included in the April report for the first time, was 1.0 percent. After a two-day Policy Board meeting on April 30 and May 1, the BOJ decided to maintain the target for the uncollateralized overnight call rate, which commercial banks charge on loans to each other, at about 0.5 percent. 'It remains extremely uncertain how countries will develop their trade policies and how such policies will affect overseas economic and price trends,' BOJ Governor Kazuo Ueda told a news conference on May 1. In March last year, the BOJ ended its 11-year ultra-easy monetary policy and lifted the negative interest rate policy, which marked its first interest rate hike in 17 years. Interest rates were raised in July and again in January, both by about 0.25 percent. But the central bank kept them steady in March, citing rising concerns about the economic policies of U.S. President Donald Trump, who returned to the White House in January. Trump levied what he calls reciprocal tariffs on April 2, causing stock prices to nose-dive and triggering the yen's sharp appreciation against the dollar, before the levies were paused hours later. Still, Ueda said the BOJ will continue to gradually raise policy interest rates if economic activity and prices move in accordance with the bank's outlook. 'We will carefully monitor domestic and overseas economies, price movements and financial market trends and make decisions without preconceived notions,' Ueda said. BOJ policymakers are expected to examine the outcome of government negotiations on U.S. tariffs and the impact on corporate activities before deciding whether to proceed with the next interest hike. In the Outlook for Economic Activity and Prices report, the BOJ also revised down its inflation projections. The central bank said the consumer price index, excluding volatile perishables, is expected to increase 2.2 percent in fiscal 2025, down from 2.4 percent in the January report, and 1.7 percent in fiscal 2026, down from 2.0 percent. The forecast for fiscal 2027 was 1.9 percent. Ueda acknowledged that the revised GDP and CPI growth projections may not be as accurate as the BOJ's conventional estimates, citing the uncertainties brought on by U.S. policies. The April report said the 2-percent price stability target for what the BOJ calls 'underlying CPI inflation,' which does not take rising import prices and other temporary factors into account, is likely to be achieved in the second half of a three-year period through fiscal 2027. The central bank effectively pushed back its goal because the January report said the target is likely to be achieved in the second half of a three-year period through fiscal 2026. While the CPI growth rate has been 2 percent or higher for three years, the BOJ has said underlying CPI inflation has yet to reach that level. The BOJ has been aiming to achieve a virtuous cycle of rising prices and wages. The CPI for Tokyo's 23 central wards, excluding perishables, increased a solid 3.4 percent in April from a year earlier, according to internal affairs ministry figures released on April 25. Service prices, which are closely aligned with wages, rose 2.0 percent, compared with 0.8 percent in March. During the 'shunto' annual spring labor offensive, companies agreed to raise wages of regular employees by 5.37 percent on average, exceeding the 5-percent mark for the second straight year, according to figures compiled by Rengo (Japanese Trade Union Confederation). The average wage increase was 4.97 percent among small and midsize companies, where fewer than 300 workers are organized. (This article was compiled from reports by Kuniaki Nishio and Chihaya Inagaki.)
Yomiuri Shimbun
01-05-2025
- Business
- Yomiuri Shimbun
BOJ Keeps Key Interest Rate at 0.5% over U.S. Tariff Uncertainty; Lowers Growth Forecasts, Inflation Rate Projections
The Yomiuri Shimbun Bank of Japan Gov. Kazuo Ueda speaks at a press conference at the BOJ's headquarters in Tokyo on Thursday. The Bank of Japan decided to keep its benchmark short-term interest rate at around 0.5% at a monetary policy meeting on Thursday. The central bank determined that it is necessary to cautiously examine the impact on both economic and price outlooks stemming from high U.S. tariffs. It also lowered its growth forecasts for fiscal 2025 and fiscal 2026 as well as its inflation rate projections from the figures presented in January. Following the policy meeting, the BOJ released its quarterly report of the Outlook for Economic Activity and Prices, in which it states its forecasts for the growth rate of Japan's real gross domestic product and the rate of increase in the core consumer price index – which covers all items except fresh food. The forecasts are the medians of the nine Policy Board members. The growth forecast for fiscal 2025 was cut to 0.5%, down 0.6 percentage points from the previous projection in January, while that for fiscal 2026 was lowered to 0.7%, down 0.3 percentage points. The report states that trade and other policies of various countries will lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors. The BOJ also trimmed its inflation rate expectations to 2.2% for fiscal 2025 and 1.7% for fiscal 2026, down 0.2 percentage points and 0.3 percentage points from the previous projections, respectively. The cited reasons include a decline in oil prices and a slowdown in the pace of economic growth. The bank released its inflation expectation for fiscal 2027 for the first time, which was 1.9%. According to the report, the BOJ expects its 'price stability target' of 2% to be achieved in the 'second half of the projection period.' Regarding future policy operations, the BOJ maintained in the outlook report the wording that it 'will continue to raise the policy interest rate and adjust the degree of monetary accommodation.' However, it has now added the caveat 'in accordance with improvement in economic activity and prices.'
01-05-2025
- Business
BOJ Keeps Policy Intact, Cuts Inflation Forecasts
Tokyo, May 1 (Jiji Press)--The Bank of Japan on Thursday decided to keep its monetary policy unchanged while cutting its inflation and economic growth forecasts. Amid growing uncertainty over the course of the global economy in the face of U.S. President Donald Trump's high tariff policy, the BOJ is closely monitoring how the Japanese economy and prices will be affected. The nine members of the Japanese central bank's Policy Board, at a two-day meeting from Wednesday, unanimously voted to maintain the policy of guiding the unsecured overnight call rate, Japan's benchmark short-term interbank lending rate, to around 0.5 pct. The policy rate was raised from around 0.25 pct in a decision made in January. In its latest quarterly Outlook for Economic Activity and Prices report, adopted at the Policy Board meeting, the BOJ pushed back the projected timing of stably achieving its price stability target of 2 pct to the latter half of the report's projection period through fiscal 2027. The central bank now forecasts that Japan's core consumer price index, which excludes often volatile fresh food prices, will rise 2.2 pct in fiscal 2025, which started last month, down from 2.4 pct in the previous report released in January. The core CPI growth outlook was revised down to 1.7 pct from 2.0 pct for fiscal 2026 and the newly disclosed growth projection for fiscal 2027 stood at 1.9 pct. [Copyright The Jiji Press, Ltd.]
Japan Times
27-04-2025
- Business
- Japan Times
BOJ may lower economic and price forecasts
The Bank of Japan is expected to consider revising down its forecasts for the country's economy and prices in a quarterly report to be adopted at its two-day policy-setting meeting from Wednesday, due to the impact of U.S. President Donald Trump's high tariff policy. Meanwhile, the central bank is likely to keep its monetary policy unchanged. Trump indicated his intention to impose high tariffs on Japanese products as well, fueling concerns that Japanese companies could face declining exports and deteriorating earnings. Against this backdrop, the BOJ is projected to consider lowering its fiscal 2025 growth forecast for the Japanese economy, which stood at 1.1% in its latest Outlook for Economic Activity and Prices report released in January. Furthermore, given the possibility of an economic downturn, the BOJ is expected to consider lowering its core consumer price index outlook for fiscal 2025, which started this month, and also for fiscal 2026. In the January report, the central bank said it expects the core CPI to go up 2.4% in fiscal 2025 and rise 2.0% in the following year. The BOJ currently expects that its price stability target of 2% will be realized stably around fiscal 2026, which is in the latter half of the projection period of the outlook report. The focus of the upcoming report will be on whether the projected timing of achieving the price target will be pushed back to fiscal 2017 due to the possible lowering of economic growth and price forecasts. However, even if the target achievement date is postponed, the BOJ is expected to maintain its policy of raising interest rates, as it believes that the mechanism for underlying inflation to rise toward 2% remains intact.
27-04-2025
- Business
BOJ May Lower Economic, Price Forecasts
News from Japan Economy Apr 27, 2025 11:37 (JST) Tokyo, April 27 (Jiji Press)--The Bank of Japan is expected to consider revising down its forecasts for the country's economy and prices in a quarterly report to be adopted at its two-day policy-setting meeting from Wednesday, due to the impact of U.S. President Donald Trump's high tariff policy. Meanwhile, the Japanese central bank is likely to keep its monetary policy unchanged. Trump indicated his intention to impose high tariffs on Japanese products as well, fueling concerns that Japanese companies could face declining exports and deteriorating earnings. Against this backdrop, the BOJ is projected to consider lowering its fiscal 2025 growth forecast for the Japanese economy, which stood at 1.1 pct in its latest Outlook for Economic Activity and Prices report released in January. Furthermore, given the possibility of an economic downturn, the BOJ is expected to consider lowering its core consumer price index outlook for fiscal 2025, which started this month, and also for fiscal 2026. In the January report, the central bank said it expects the core CPI to go up 2.4 pct in fiscal 2025 and rise 2.0 pct in the following year. The BOJ currently expects that its price stability target of 2 pct will be realized stably around fiscal 2026, which is in the latter half of the projection period of the outlook report. [Copyright The Jiji Press, Ltd.] Jiji Press
