BOJ seen upgrading fiscal 2018 growth outlook

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TOKYO — Japan’s central bank appears likely to lift its fiscal 2018 growth forecast at the policy board meeting set for Jan. 22-23, reflecting rising exports and solid domestic demand including capital investment.

The Bank of Japan, in the October edition of its quarterly Outlook for Economic Activity and Prices, projected 1.4% growth for the fiscal year that starts in April. The bank is expected to raise the figure by 0.1 or 0.2 percentage point in the next report, to be compiled on the second day of the meeting.

Crude oil prices have climbed since October, but price trends will depend heavily on the outcome of wage negotiations across Japan in the spring. The October report projected a 1.4% increase in prices for fiscal 2018.

Japan’s consumer price index excluding fresh food rose just 0.9% in November, far short of the 2% price target set by the BOJ. For the near term, the board is expected to maintain current monetary policy to keep long-term interest rates near zero.