Update: BOJ keeps policy steady, trims GDP forecast

[TOKYO] The Bank of Japan kept monetary policy steady and largely maintained its upbeat inflation forecasts on Wednesday, even as soft exports and household spending forced it to trim its economic growth projection slightly.

At a quarterly review of its long-term estimates, the BOJ cut its growth forecast for the year ending in March 2016 to a 1.7 per cent increase from the 2.0 per cent expansion it forecast in April.

As widely expected, the BOJ reiterated its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen (S$881.6 billion) through purchases of government bonds and risky assets.

BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 pm (0630 GMT) to explain the policy decision.

The central bank issues a semi-annual report on the economy and prices in April and October of each year, and reviews its long-term projections in January and June.

The BOJ has left policy unchanged since expanding stimulus in October last year to prevent slumping oil prices, and a subsequent slowdown in inflation, from delaying a sustained end to 15 years of deflation.

REUTERS