BOJ to raise Japan's fiscal 2010 growth projection to above 2%+

TOKYO, July 9 Kyodo -
The Bank of Japan is expected to raise its estimate of the nation's fiscal 2010
real economic growth to around the mid- to upper 2 percent level next week from
1.8 percent projected in April, BOJ sources said Friday.
The growth estimate revision for the year to March 2011 will come as the
central bank conducts a midterm review of April's semiannual outlook of
economic activity and prices at its two-day monetary policy meeting from
Wednesday.
The upward revision to the real gross domestic product growth stems from a
faster-than-expected expansion in demand in emerging countries that has helped
boost Japan's exports and production, the sources said.
The BOJ's Tankan quarterly business confidence survey, released last week,
indicated a spreading economic recovery, encouraging the central bank to raise
the growth forecast, they said.
The government revised its fiscal 2010 growth projection upward to 2.6 percent
in late June.
The BOJ is likely to make no major revisions to its fiscal 2011 GDP growth
forecast or its fiscal 2010 and 2011 inflation projections, the sources said.
In the April outlook, the central bank projected fiscal 2011 real GDP growth at
2.0 percent and predicted the consumer price index to fall 0.5 percent in
fiscal 2010 and rise 0.1 percent in fiscal 2011.
At the upcoming policy board meeting, the BOJ plans to leave the unsecured
overnight call rate target, its policy interest rate, unchanged at 0.1 percent
to maintain its accommodative monetary policy, the sources said.
The central bank may also keep its view given in June that Japan's economy is
showing further signs of a moderate recovery.
A senior BOJ official said the Japanese economy as well as overseas economies
now have both downside and upside risks as fears have emerged about China's
economic overheating, fiscal deterioration in Europe and economic deceleration
in the United States.
==Kyodo
2010-07-10 00:35:50


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