Japan Inflation Expected to Exceed 2% Target, Time to End Easing?

<p>&nbsp;Heading into the Bank of Japan's (BOJ) policy meeting next week, the government cut its economic growth forecast for this year and raised inflation expectations above the central bank's target.</p><p><br /></p><p>Prime Minister Fumio Kishida said that Japan's economy had recovered modestly on the back of steady wage increases and strong increases in corporate spending.</p><p><br /></p><p>In its projections, the government sees an expansion of 1.3% in the economy in the current fiscal year ending March 2024, which is down from a forecast made in January of 1.5%.</p><p><br /></p><p><br /></p><p>While overall consumer inflation is expected to reach 2.6% pa this fiscal year, higher than the 1.7% projected in January and surpassing the central bank's target of 2%.</p><p><br /></p><p>The expectation comes ahead of the BOJ's policy meeting next Friday, where it will also release its new quarterly projections.</p><p><br /></p><p>With inflation expected to exceed the central bank's 2% target, will it push the BOJ to stop its ultra-loose policy practices?</p><p><br /></p><p>The yen traded steady against the greenback at around 139.53 in the European session, failing to react to the latest report.</p>