TOKYO: The Bank of Japan is considering lowering its fiscal 2024 inflation forecast in a quarterly economic report, due out on Jan. 23, because of lower crude oil prices, people familiar with the matter told Jiji Press on Thursday.

The central bank is likely to cut its forecast for a year-on-year increase in core consumer prices, which exclude volatile fresh food prices, for the year starting in April to somewhere around 2.5 pct, the people said.

In the previous October report, the BOJ raised its fiscal 2024 inflation outlook from 1.9 pct to 2.8 pct.

The BOJ targets 2 pct inflation.

For fiscal 2025, the BOJ is unlikely to raise its inflation outlook above 2 pct from 1.7 pct in the October report as the central bank is not yet confident that the Japanese economy is in a virtuous circle of wages and prices.

The BOJ thinks that to achieve 2 pct inflation sustainably and stably, pay hikes need to spread to smaller companies in this year’s “shunto” spring wage talks.

JIJI Press