Japan's central bank keeps monetary policy, cuts economic view

TOKYO, May 1 (KUNA) -- Japan's central bank on Thursday kept its policy rate unchanged, while downgrading its assessment of the country's economy. At a two-day policy meeting, Bank of Japan's (BOJ) Governor Kazuo Ueda and his eight board colleagues agreed to maintain the benchmark short-term rate steady at around 0.5 percent, holding the policy the BOJ made in January, according to a statement released by the BOJ.
Meanwhile, in its outlook report published after the meeting, the BOJ revised down growth forecast for one of the world's largest economies, saying it is expected to grow 0.5 percent in the fiscal 2025 that began in April, compared with the 1.1 percent growth estimated in January. It also downgraded next year's view to 0.7 percent from 1.0 percent.
"Japan's economic growth is likely to moderate, as trade and other policies in each jurisdiction lead to a slowdown in overseas economies and to a decline in domestic corporate profits and other factors," the central bank commented. "Thereafter, Japan's economic growth rate is likely to rise, with overseas economies returning to a moderate growth path," it said.
In the report, the BOJ cut its outlook for core inflation, which excludes volatile fresh food, for fiscal 2025 to 2.2 percent, down from its previous forecast of a 2.4 percent increase. Inflation for fiscal 2026 is predicted to rise 1.7 percent, slower than 2.0 percent estimate in January, the bank added. The BOJ pointed out various risks to the outlook, saying, "In particular, it is extremely uncertain how trade and other policies in each jurisdiction will evolve and how overseas economic activity and prices will react to them." (end) mk.aa