The Bank of Japan on Thursday trimmed its economic growth and inflation forecasts for the year through March 2022, keeping its ultraloose monetary policy intact to buttress a fragile economic recovery from the COVID-19 malaise.

The BOJ gave the bleaker economic outlook after a two-day policy meeting, as parts shortages have hit automakers such as Toyota Motor Corp. that have been forced to cut output. COVID-19 restrictions that were in place until recently have delayed a recovery in the services sector.

The central bank said the economy will likely grow 3.4%, rather than the 3.8% projected earlier.