BOJ to consider cutting growth forecast for this year: Nikkei By Reuters

© Reuters. FILE PHOTO: A man wearing a protective mask walks past the Bank of Japan headquarters amid the coronavirus disease (COVID-19) outbreak in Tokyo

By Leika Kihara TOKYO (Reuters) – The Bank of Japan will consider cutting its economic forecast for the current fiscal year ending in March, as consumption is affected by state of emergency measures against the coronavirus, it reported on Wednesday. However, the central bank may revise its growth forecast for the following year upwards in its quarterly review of its projections to be published next week, according to the newspaper. In its current projections released in October, the BOJ expects the economy to expand 3.6% next fiscal year following an estimated contraction of 5.5% this year. While the state of emergency will affect spending, the BOJ expects robust exports and a boost to growth from the government stimulus package to ease some of the pain in the year starting in April, sources familiar with its thinking told Reuters. Many BOJ officials are cautious about increasing the stimulus in next week’s rate review, as measures to boost demand would run counter to government efforts to keep citizens home, the sources said on condition of anonymity, as they were not authorized to speak in public. Japan declared a limited state of emergency in Tokyo and three neighboring prefectures last week to stop the spread of the coronavirus. Prime Minister Yoshihide Suga said he is considering extending the restrictions beyond Tokyo as infections continue to rise, stoking fears of a double recession in the world’s third-largest economy.

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