TOKYO, Oct 27 (Reuters) - The Bank of Japan on Thursday cut its economic forecast for the current and following fiscal years on slowing global growth, but stuck to its view that the country was on track for a moderate economic recovery.
In its twice-yearly outlook report on the economy, the central bank said overseas economic growth will likely slow for the time being but will pick up again, driven by the strength in emerging economies.
But the BOJ warned of risks from volatile market moves and slowing global growth weighing on Japan’s economic recovery.
“There has been some progress in stabilising (Europe’s) financial stability but markets remain tense due to uncertainty over details on how the measures will be implemented,” the BOJ said in the report.
The BOJ cut its core consumer inflation forecasts for the year to March 2012 and for the following year, reflecting a base year change in the core price gauge in July that shaved an average 0.6 percentage point off growth.