Japan’s Improved Growth Forecast Suggests BOJ Upgrade in January
Japan’s Improved Growth Forecast Suggests BOJ Upgrade in January
(Bloomberg) -- If history is anything to go by, an upgrade of the Bank of Japan‘s growth projection for next year is likely in January after the government nudged up its own economic outlook.
Japan’s government now sees the economy expanding 1.4% in the year starting in April, compared with a projection in July of 1.2%, according to its latest forecasts released Wednesday. The government cited the stimulus package unveiled by Prime Minister Shinzo Abe earlier this month as a key factor for the faster growth.
That’s twice the BOJ’s estimate from October. The central bank, which is expected to stand pat on policy at the end of its meeting on Thursday, isn’t due to revise its quarterly projections until January. Past forecasts for new fiscal years suggest the government and central bank are usually on the same page or thereabouts on growth at the start of each year.
BOJ officials see a sizable impact from the stimulus, raising the likelihood that the bank will upgrade its economic forecasts for the first time in a year, people familiar with the matter told Bloomberg earlier this month.
The bank will assess the impact of the fiscal package as it compiles the new projections at its January 20-21 policy meeting. If its forecasts turn out in line with the government’s, that will likely strengthen the view that the BOJ won’t embark on further easing barring a sudden deterioration in economic or market conditions.
To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net
To contact the editor responsible for this story: Paul Jackson at pjackson53@bloomberg.net
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