The Bank of Japan has cut its target for real gross domestic product (GDP) growth to +1.1 percent for fiscal year ending March 2015, down from its January projection of 1.4 percent.
In its semi-annual report released Wednesday, the central bank however kept its real GDP forecast for fiscal year ending March 2016 unchanged at +1.5 percent.
It also kept its core consumer price index (CPI) projections intact at +1.3 percent for the fiscal year 2014/2015 and +1.9 percent for 2015/2016, respectively, excluding the effects of the sales tax hike and came into effect this month.
While the BOJ said risks to its economic outlook are balanced, uncertainty over its exports sector remains high.
Earlier on Wednesday, the central bank kept monetary policy steady by a unanimous vote, maintaining its pledge to increase its monetary base by 60-70 trillion yen a year.