TOKYO (Kyodo) -- The Bank of Japan began a two-day policy meeting on Wednesday where it is expected to forecast that nationwide consumer price growth in fiscal 2021 will come in under its 2 percent inflation target amid uncertainty over the global economy.
The first price projection for the year ending in March 2022 will be contained in a quarterly report to be released following the meeting, which comes as the central bank is struggling to revive consumption and fulfill its 2013 pledge to achieve the price target.
Amid slow wage growth, prices in Japan remain tepid and core consumer prices, excluding fresh food items because of their volatility, only rose 0.8 percent in March from a year earlier.
In a BOJ quarterly survey released this month, business sentiment among large manufacturers stood at 12 in March, compared with 19 three months ago -- registering the biggest points loss since December 2012 -- on the back of concerns over a slowdown in the Chinese and other economies abroad.
Some economists said Japan's planned consumption tax hike in October from the current 8 percent to 10 percent could further hurt private consumption.
The BOJ already revised downward its inflation forecasts for fiscal 2019 and fiscal 2020 in January.
The central bank is expected to maintain its ultra-easing monetary stimulus and keep interest rates at their current ultralow levels.
But it looks reluctant to take additional monetary easing measures at the policy meeting through Thursday, with Governor Haruhiko Kuroda having told a parliamentary committee last week that he is "confident in the outlook that the Japanese economy will expand moderately."
The key Nikkei stock average retook the 22,000 line last week, supported by growing expectations for easing U.S.-China trade tensions.
The central bank has also grown concerned over possible negative effects on financial institutions if it further lowers interest rates.
Banks across Japan have already suffered lower profitability due to prolonged ultralow interest rates, while the U.S. Federal Reserve and the European Central Bank have changed course and halted credit tightening to bolster their economies.