TOKYO, Oct. 29 (Xinhua) — The Bank of Japan (BOJ) on Thursday lowered its economic growth and inflation forecasts for the current business year through March, although kept its ultra-loose monetary policy intact.
The BOJ said in its latest outlook report that it projects the economy here will contract 5.5 percent in the fiscal year 2020.
This compares to the central bank’s earlier forecast that the economy will shrink 4.7 percent in the same time frame.
The central bank also said the consumer price index is forecast to decline 0.6 percent, compared to an initial forecast in July of a 0.5 percent drop.
At the end of a two-day policy setting meeting ending Thursday, the BOJ opted to maintain its short-term interest rates at minus 0.1 percent while guiding long-term rates at around zero percent.
The central bank will also continue buying government bonds from financial institutions without setting a limit and exchange-traded funds (ETFs) at an annual pace of 12 trillion yen (115 billion U.S. dollars), as part of its massive stimulus measures.
In its outlook report, the BOJ said the economy is likely to improve slightly as the novel coronavirus situation improves.
“Japan’s economy is likely to follow an improving trend with economic activity resuming and the impact of the novel coronavirus waning gradually, but the pace is expected to be only modest,” the bank said in the report.
In the previous meeting in September, the bank assessment stated that that the economy “has started to pick up with economic activity resuming gradually,” although it remained in a “severe” situation due to the spread of COVID-19.