TOKYO?The Bank of Japan revised down its inflation forecasts Tuesday following a raft of poor data, but held off expanding stimulus in a sign that Gov. Haruhiko Kuroda has set the bar much higher for taking action.

At the end of a two-day meeting, the first since a broad policy revamp in September, the central bank's board voted to keep its new anchor for 10-year government bond yields at zero, according to a statement. The BOJ also left its target for a short-term interest rate on some commercial bank deposits at minus 0.1%.

Instead, the bank pushed back its forecast date for hitting 2% inflation to around fiscal 2018. Previously the bank said it would reach its target in fiscal 2017. TheJapanese fiscal year ends in March.

The decision to stand pat on policy comes despite the government's headline inflation measure showing consumer prices have fallen in each month since March. Even the BOJ's own inflation gauge, which excludes both fresh food and energy, edged up only 0.2% in September, the slowest increase in three years.

The bank's sidestepping of action demonstrates a change in Mr. Kuroda's "bazooka" approach. Having failed to deliver 2% inflation in two years?as he boldly promised in April 2013?Mr. Kuroda has now shifted to a slower, more pragmatic approach that partly reflects the inability of central banks across the world to spark price growth as easily as they once thought. Economists say the ball is now in the court of Prime Minister Shinzo Abe's administration.

The BOJ also kept the details of its asset purchases unchanged Tuesday, including targets for buying certain amounts of stock and real-estate funds every year. It essentially reiterated that it would purchase Japanese government bonds "at more or less" the previous annual target pace of 80 trillion yen ($767 billion).

Write to Takashi Nakamichi at and Megumi Fujikawa at

(END) Dow Jones Newswires

October 31, 2016 23:35 ET (03:35 GMT)

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