The Bank of Japan is anticipated to reduce its interest rates into a negative territory further at or before the bank's meeting in July. Poor domestic spending combined with the oil price slump has led economic researchers to lower their outlook for core buyer prices in Japan for fiscal year 2016 and 2017.

The bank is anticipated to trim its interest rate to minus 0.2%, according to survey data collected by Reuters. Out of 14 analysts surveyed, 13 analysts predict that the Bank of Japan will trim its negative interest rate policy more at or before the summit in July. According to Takeshi Minami, chief financial expert at Norinchukin Research Institute, price recovery is nailed by global oil market slump and increasing value of Japanese yen.

In January, BOJ applied 0.1% charge on a selected part of financial organisation's present account deposits in the bank. However, this move did not contribute much to push the yen lower. The Japanese yen rallied 7% against the US dollar in the currency market following the announcement of BOJ's policy.

The poll also found that there is no chance for the yen to slip to 120 against the dollar till the end of 2016. The weaker yen supports the export sector of the country but makes imports expensive. The size of headline inflation is expected to be 0.4% in the fiscal year 2016, down from the previous month estimation of 0.6%.

However, Haruhiko Kuroda, governor of BOJ, said currently he has no plans to trim the negative interest rates further. He said the bank is ready to make any kind of monetary adjustments if required to reach their price goal. He continued that banks in Japan have plenty of money to withstand any economic downfall.

The US dollar dropped against Japanese yen in the currency market and settled at yen 113.20 after Kuroda's statement, MarketWatch said. Kuroda said that the bank will utilize the "three dimensions" of quantitative and qualitative method to achieve the inflation rate goal of 2%.

For the fiscal year 2017, core CPI, excluding the effect of an expected sales tax increase in April 2017, is anticipated to increase 1%, down from February forecast of 1.2%. Takumi Tsunoda, Shinkin Central Bank's economist, said poor domestic expenditure made it hard for organisations to hike prices. The bank's fresh CPI, excluding impacts of fresh food expenses and instability in fuel prices, increased 1.1% during the month of January, compared to 1.3% in the previous month.

Meanwhile, Hiroshi Nakaso, deputy governor of BOJ, remarked that the bank is ready to slash interest rates further. He added that capital markets require time to cope up with the February 16 negative rate policy, as reported by THE STRAITS TIMES.

The bank is trying to implement various monetary reforms to boost domestic spending in the country. Economists believe that the nation will sustain global oil market fall and decrease in consumer price index.