BOJ trims growth forecast on quake, upbeat on outlook
TOKYO |
(Reuters) - The Bank of Japan on Thursday sharply cut its economic forecast for the current fiscal year due to last month's devastating earthquake but projected a rebound in the autumn, signaling that it has eased policy enough to keep the economy afloat for now.
In its twice-yearly outlook report on the economy, the central bank said it needs to focus on downside risks to the economy for the time being, in a sign it is sticking to its easy policy bias.
But the BOJ revised up its economic forecast for the next fiscal year ending in March 2013, saying the recovery would accelerate from around October this year.
"From the autumn onward, the rebuilding of supply chains will make further progress and supply constraints will ease as limits to power supplies begin to show improvement," the central bank said in its report.
The BOJ raised its consumer inflation forecast for the year to March 2012 and for the following year, reflecting a recent spike in commodity costs.
The BOJ revised down its GDP forecast for the current fiscal year to 0.6 percent from 1.6 percent, its forecast in January, while revising up the projection for the following fiscal year to 2.9 percent from 2.0 percent.
(Reporting by Leika Kihara, Rie Ishiguro and Tetsushi Kajimoto; Editing by Edmund Klamann)
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