BOJ may project inflation missing target for three more years: sources

TOKYO (Reuters) – The Bank of Japan this month might concede that inflation could fall short of its 2 percent target for as long as three more years, sources say, which would be the strongest sign yet of acceptance that its goal cannot be reach quickly.

The view may emerge from the BOJ’s rate review on July 30-31, they say. At the policy meeting, the central bank will conduct a quarterly review of its long-term projections.

Instead of ramping up stimulus to fire up inflation, the BOJ will also point to structural factors that may weigh on inflation for years, say the people familiar with its thinking.

At the review, the BOJ will consider cutting not just its price forecasts for the current and following years, but the projection for the year ending in March 2021, the sources say.

The BOJ now projects inflation of 1.3 percent this fiscal year, followed by 1.8 percent for both fiscal 2019 and 2020.

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