The International Monetary Fund trimmed its growth forecasts for 2019 and 2020 to 2.9% and 3.3%, respectively, and 3.4% in 2021. IMF expects that the global economic outlook remains sluggish despite a slightly improving world economy and warned that geopolitical tensions in the Middle East could impact global oil supplies. The Middle East and Central Asia is expected to record 2.8% growth in 2020, slightly lower than the IMF's October outlook and reflecting a downward revision to Saudi Arabia's oil output following last month's decision by the OPEC+ group to extend supply cuts. It expects the region to pick up speed in 2021 with growth of 3.2%.
ECONOMIC NEWS: The Bank of Japan kept its short-term deposit rate unchanged at minus 0.1% and its target for 10-year Japanese government bond yields at around zero on Tuesday. In its quarterly report, the BOJ's policy board said it expects the economy to grow 0.8% in the year ending March 2020, compared with a forecast of 0.6% in the previous report in October. It expects 0.9% expansion in the year ending March 2021, compared with an earlier forecast of 0.7%. Last month, Prime Minister Shinzo Abe's cabinet approved a $120 billion stimulus program, designed to help recovery from a typhoon in October and address downside risks to the economy. The BOJ expects core consumer prices, excluding fresh food, to rise 1.4% from a year earlier in the year ending March 2022, compared with a 1.5% projection for that year made in October and lower than the bank's 2% target.
CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, appreciated against a basket of currencies. The Japanese yen traded at 109.95 against the dollar after touching an earlier low of 110.21.
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