ECONOMY | Staff Reporter, Japan

Japan's neutral monetary policy to drive prices up in 2018

Inflation is expected to hit 2%.

BMI Research forecasted that Bank of Japan (BoJ)’s expansionary monetary and fiscal policies will cause an increase in prices in 2018.

According to BMI Research, BoJ is likely to tolerate an increase of prices beyond its 2% inflation target.

“With the central bank still confident in its accommodative policy, it is likely that the BoJ will remain as one of the most expansionary central banks in an environment of global monetary tightening, which is likely to be negative for the Japanese yen,” BMI Research said.

With Japan’s CPI remaining at 0.6% YoY in November 2017, BoJ predicts CPI (except fresh food) to increase 2.3% in 2019.

Japan’s GDP is expected to be at 1.4% in 2018.

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