TOKYO, Oct. 28 (Xinhua) -- The Bank of Japan (BOJ) on Thursday trimmed its economic growth and inflation forecasts for the year through March, and maintained the ultraloose monetary policy to promote economic recovery from the COVID-19 pandemic, local media reported.

Due to parts shortages that have forced automakers to cut output and COVID-19 restrictions that have delayed recovery in the services sector, the BOJ suggested the bleaker economic outlook after a two-day policy meeting.

According to the Japanese central bank, the economic growth will likely be 3.4 percent instead of the 3.8 percent projected in its previous policy-setting meeting in July. Core consumer prices excluding volatile fresh food are expected to stay at 0.0 percent, lower than its earlier projection of a 0.6 percent increase.

The BOJ stayed with its "yield curve" control program that set short-term interest rates at minus 0.1 percent and guide 10-year Japanese government bond yields around zero percent to remain a low borrowing cost for companies and households.

"Japan's economy has picked up as a trend, although it has remained in a severe situation due to the impact of COVID-19 at home and abroad," the BOJ said in maintaining its assessment.

Because of supply-side constraints, exports and industrial output have been "weak" in some areas, with the BOJ changing its wording from "affected," although they have continued to increase.

In the latest economic outlook report, the growth outlook for the year from next April was revised upward to 2.9 percent from 2.7 percent.

New Japanese Prime Minister Fumio Kishida has stressed the need to keep monetary easing amid a fragile economy from the COVID-19 pandemic and for the central bank to stay with the 2 percent inflation target.

However, opposition parties claimed that the bold monetary easing policy under "Abenomics," an economy-boosting program launched by former Prime Minister Shinzo Abe, had little effect on boosting inflation expectations, and questioned the absence of an exit scenario.

The recent sharp drop in COVID-19 infections and progress in vaccinations have raised hopes for an economic reactivation. But the combination of a shortage of parts, higher energy and material costs, and a weaker yen, is making things difficult for the BOJ.

The BOJ would continue to buy exchange-traded funds with an upper purchase limit of 12 trillion yen (106 billion U.S. dollars) a year. The policy board also decided to keep funding support for firms hit by the pandemic. Enditem

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