(Bloomberg) -- Bank of Japan officials are likely to discuss cutting their forecasts for economic growth and a gauge of inflation that includes energy when they gather to set policy later this month, even as their overall assessment of price trends remains intact, according to people familiar with the matter.

The officials will probably mull a downward revision to the outlook for consumer prices excluding fresh food to around 2.5% from 2.8% for the fiscal year starting in April due to a drop in oil prices, the people said. For the following fiscal year, they continue to expect the gauge to be a tad lower than the bank’s 2% target.

The central bank will deliver its updated quarterly projections when it meets on Jan. 22-23 amid widespread expectations it will leave its negative interest untouched this month as it waits for more evidence of positive wage and price developments.

Officials are also likely to discuss a cut in the growth forecast for this fiscal year after weaker-than-expected GDP figures in the third quarter, the people said. They see little need for major changes to their assessment of underlying price trends, so the forecast for prices excluding fresh food and energy will probably be more or less unchanged, according to the people.  

A final decision will be made only after officials peruse all available data and conditions in financial markets. Officials continue to expect inflation will re-accelerate gradually after a temporary slowdown, they said.

The prospect of a downgrade to inflation estimates is likely to firm up market speculation that authorities will stand pat this month. 

The yen weakened a touch against the dollar following this report.

Earlier this week, inconclusive evidence of wage growth from hearings of businesses by BOJ branch managers already heightened such notions, as Governor Kazuo Ueda has said he needs clear evidence of a virtuous wage-price cycle before he can normalize policy by ditching the negative rate.

BOJ officials also need more data to discern the economic impact from the Noto Peninsula earthquake that struck on New Year’s day, the people said. 

Economists have flagged April as the most likely month for the BOJ to raise its short-term interest rate for the first time since 2007, after the release of preliminary results of annual wage negotiations between unions and companies.

Since the quake, market expectations for the ending of the bank’s negative rate have been pushed back. Overnight swaps now put the likelihood of a hike by April at around 28% compared with over 60% at the end of last year.

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