NIkkei – BOJ may cut inflation forecast to lower 1% range for fiscal 2015

Headline in the Nikkei this morning …. but note that the news hit the wires many hours ago, Ryan on top of it as usual:

• BOJ may cut core CPI forecasts for FY2015

and

• BOj expected to cut FY 2015 core CPI to 1.5% or lower

From the Nikkei:

• The Bank of Japan is considering lowering its forecast for the rise in the consumer price index to the lower half of the 1% range due to the impact of cheap crude oil
• The central bank is scheduled to announce the price forecast Jan. 21 after a two-day policy board meeting
• It will take a second look at the outlook compiled at the end of October
• Plunging crude oil prices will be a key factor
• But for fiscal 2016, the BOJ will likely maintain the projection at the 2% level
• The average private-sector projection sees the CPI rising 0.84% in fiscal 2015, according to data released Tuesday by the Japan Center for Economic Research

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Note that the ‘official’ measure of core inflation in Japan excludes food, but includes energy. Given this, and the falling oil price then it is logical for the BOJ to adjust their target. The BOJ and administration will be keeping their eye on the goal, which is to get the Japanese economy growing more strongly again. Lower energy input prices will help. Others may well have a different opinion.