BOJ cuts growth, price forecasts; keeps policy steady

[TOKYO] The Bank of Japan kept monetary policy steady on Thursday (Oct 28) and slashed this year's inflation forecast in a sign that it has no intention any time soon of following other central banks in preparing an exit from crisis-mode policies.

The 9-member board also cut this year's growth forecast but maintained its assessment that the world's third-largest economy was headed for a moderate recovery.

"Japan's economy remains in a severe state but is recovering as a trend," the BOJ said in a quarterly report on the economic and price outlook.

"Exports and output are weakening due to the impact of supply constraints, but continue to increase as a trend," it said.

As widely expected, the BOJ maintained its short-term interest rate target at -0.1 per cent and that for 10-year government bond yields around 0 per cent.

REUTERS