URGENT: BOJ ups inflation outlook, leaves ultraloose policy unchanged

© Kyodo News

The Bank of Japan on Thursday sharply lifted its inflation outlook for fiscal 2022 to 1.9 percent amid higher commodity prices but maintained its ultraloose monetary policy aimed at achieving 2 percent.

At the end of a two-day policy meeting, the BOJ decided to set short-term interest rates at minus 0.1 percent, while guiding 10-year Japanese government bond yields to around zero percent to support the economy, still in the midst of a recovery from the COVID-19 fallout.

The core consumer price index, excluding volatile fresh food items, is expected to rise 1.9 percent in fiscal 2022 from a year earlier, up from its previous forecast of a 1.1 percent rise, according to the BOJ's outlook report released Thursday.

The Japanese economy will likely expend 2.9 percent, downgraded from 3.8 percent growth in the previous projection in January.