Japan media ICYMI – Bank of Japan considering raising its inflation outlook to nearly 3%

<p>The Bank of Japan is considering raising its inflation outlook for the current business year to next March, from 2.5% at present to near 3%.</p><p>That's the report in Japanese media, Kyodo, the item cited "sources close to the matter":</p><ul><li>upward revision would reflect price hikes that have been broadening further than expected and rising crude oil prices, the sources said</li><li>also due to the yen's depreciation boosting import prices</li></ul><p>The background to this is that:</p><ul><li>the index for retail prices remained at a high level for both major manufacturers and nonmanufacturers in the latest BOJ Tankan business survey, released earlier this month</li><li>the BOJ announced in July it'd allow 10-year government bond yields to rise toward 1.0%</li><li>Bank of Japan Governor Ueda continues to insist on the need to retain monetary easing, ruling out a near-term rate hike</li><li>current BOJ estimates are that core consumer prices, excluding volatile fresh food items, will undershoot the 2% target in fiscal 2024 and 2025</li><li>The BOJ maintains that the 2% inflation goal will not be achieved in a sustainable and stable fashion without sustainable wage growth, this despite core CPI sitting above 2% for over a year. The Bank views the weakening yen's impact on rising import costs largely responsible.</li></ul><p>USD/JPY update, sticky around 148/149:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.