Bank Of Japan Cuts Economic, Inflation Outlook For FY 2025, Keeps Rate Steady

TOKYO, May 1 (Bernama-Kyodo) -- The Bank of Japan on Thursday cut its economic and inflation projections for the current fiscal year from April and maintained its benchmark interest rate, as concerns grew over the impact of hefty United States (US) tariffs on the economy, Kyodo News Agency reported.

The central bank warned of a decline in domestic corporate profits as trade frictions are likely to lead to a slowdown in overseas economies. It also revised downward its outlook for economic growth and prices for fiscal 2026.

In the latest quarterly outlook report, the central bank said it expects the Japanese economy to grow 0.5 per cent in the current fiscal year that started in April, compared with its earlier projection of a 1.1 per cent expansion.

Core consumer prices, excluding volatile fresh food, are projected to rise 2.2 per cent in fiscal 2025, against 2.4 per cent forecast in January.

"It is extremely uncertain how trade and other policies in each jurisdiction will evolve and how overseas economic activity and prices will react to them," the BOJ said after leaving the short-term rate unchanged at around 0.5 per cent for the second consecutive meeting as widely expected.

The BOJ, which has long targeted sustainable 2 per cent inflation, said it expects the rate to range between 1.5 and 2.5 per cent between fiscal 2025 and 2027, the forecast period of the latest report.

-- BERNAMA-KYODO