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Investing.com-- The Bank of Japan is likely to consider raising at least one of its inflation forecasts at its July 31 policy meeting, as food and energy prices climb more than previously expected, Bloomberg reported on Monday, citing people familiar with the matter.
Officials were weighing an upward revision to the current fiscal year’s core consumer price index (CPI) forecast of 2.2%, following a sharper-than-anticipated surge in rice and other food prices, the report said.
Rising oil prices due to Middle East tensions are also a contributing factor, the report added.
Despite the potential forecast change, the BOJ is expected to keep its benchmark interest rate unchanged at 0.5%, according to the Bloomberg report.
Officials still see inflation aligning with the central bank’s long-term 2% goal during the latter half of its outlook period through March 2028, the report said.
Uncertainty remains high, and policymakers are monitoring the impact of U.S. tariffs announced by President Trump, which have yet to be factored into the BOJ’s projections, the report added.