In a mid-year review of its forecasts published on Thursday, the Japanese government cut economic growth forecast for the current fiscal year to 1.3% expansion from 1.5% projected in January.

Additional takeaways

“Expect the economy to grow 1.2% in fiscal 2024.”

“Expect overall consumer inflation to hit 2.6% in the current fiscal year, up from 1.7% seen in January and exceeding BoJ’s 2% target.”

“Expect overall consumer inflation to hit 1.9% in fiscal 2024.”

"While slowing exports will likely drag on growth, consumption is seen recovering mainly for services. Capital expenditure is also expected to increase.”

Market reaction

At the time of writing, USD/JPY is trading at 139.37, down 0.21% on the day.