The Bank of Japan is almost certain to cut its inflation forecast for the fiscal year starting in April given the sharp fall in oil prices, according to sources familiar with the matter.
The government's decision to make preschool education free adds to the case for the downgrade, which will be delivered at the end of the next board meeting on Jan. 23, the people said. Looming cuts to mobile phone charges darken the picture but are hard to quantify, they said.
There are no indications that monetary policy will be changed at the gathering because these pressures are seen as temporary and don't change the picture of underlying inflation, according to the sources.