AFP, TOKYO: Japan’s central bank cut its annual inflation forecast yesterday but kept its ultra-loose monetary policy unchanged, even though overseas counterparts have started turning off the

stimulus taps.

The Bank of Japan also maintained its 2.0-per cent inflation target—seen as crucial in a long battle against deflation that has hobbled the once-booming economy—as separate data Tuesday showed household spending and factory output edged down in September.

Japan’s inflation rate came in at 0.7 per cent in September.

“The consumer price index has continued to show relatively weak developments—mainly against the background that firms’ wage- and price-setting stance has remained cautious,” the central bank said in a statement after its latest meeting.

The BoJ slashed its inflation forecast to 0.8 per cent for the fiscal year through March 2018 from an earlier 1.1 per cent estimate, and also slightly trimmed its projection for the following year to 1.4 per cent.