BoJ’s Shirai forecasts inflation dip
Policy board member doubts baseline scenario
Sayuri Shirai believes inflation will only reach the Bank of Japan's (BoJ) 2% inflation target towards the end of 2016 – later than the central bank's baseline forecast.
Speaking today with business leaders in Okinawa, Shirai, a BoJ policy board member, said she believes that annual CPI inflation – currently around 1.25% – will "decelerate" in the coming months as energy prices fall, though it "should remain at above 1%".
It will then pick up again in the last quarter of the year, and slowly increase to 2%. Shirai stressed this will be a "gradual move" on account of the slow adjustment process in households' medium and long-term inflation expectations. "Thus, the rate of inflation will likely be more moderate than the Bank's baseline scenario," she said.
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