Bank of Japan cuts growth outlook

TOKYO • The Bank of Japan yesterday cut its growth outlook and pushed back the timeline for a key inflation target, but held off fresh easing even as Tokyo's blueprint for reviving the world's No. 3 economy falters.

The central bank's chief left the door open to more stimulus, however, and said there was "no limit" to what policymakers could do.

Japan is teetering on the edge of recession in the face of slowing growth in China and shaky global economy, while weak inflation and consumer spending at home have helped slam the brakes on growth.

Some analysts had predicted the Bank of Japan would expand its massive 80 trillion yen (S$930 billion) annual asset-buying scheme, launched more than two years ago to kick-start growth and drag prices out of a decades-long downward spiral. But it stood pat yesterday - despite concerns the economy shrank for the second consecutive quarter - and underscored the problems it faces by cutting its growth and inflation predictions.

The central bank said it now expected growth to come in at 1.2 per cent in the fiscal year to March 2016, down from an earlier 1.7 per cent. It also forecast it would reach its 2 per cent inflation target in the six months ending March 2017 - half a year later than previously expected.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on October 31, 2015, with the headline 'Bank of Japan cuts growth outlook'. Print Edition | Subscribe