The Bank of Japan on Friday cut its growth outlook for the Asian nation, saying gross domestic product (GDP) would only expand by 1.2 percent in the fiscal year to March 2016, down from an earlier projection of 1.7 percent. Ratings agency Standard & Poor’s had already cut its sovereign credit assessment of Japan, saying Tokyo had little chance of reinvigorating the moribund economy in the short term with social welfare costs spiraling. Japan has been suffering from slowing growth in China and a shaky global economy, while weak inflation and equally weak consumer spending have also slammed the brakes on growth. Holding fire on fresh stimulus The central bank said it now expected to reach its 2-percent inflation target in the six months ending March 2017, half a year later than previously forecast. On Friday, government data showed core consumer prices contracting by 0.1 percent in September year-on-year. While falling prices may seem like a good thing for shoppers, they tend to put people off buying goods and that hurts firms, which roll back their new investment and hiring. Despite the negative news, the Bank of Japan refrained from changing its current monetary policy. Some analysts had hoped the… Read full this story
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