TOKYO (Reuters), – Japan’s Bank of Japan expects to increase its inflation forecast to near 2% during this month’s policy meeting, as rising global commodity prices drive up food and energy costs. Three sources close to the Bank of Japan’s thinking said that.

The central bank will not allow inflation to fall below 2% with the upgraded policy, but it will insist on its determination to remain loose to ensure a fragile economic recovery.

The BOJ is expected to increase its core consumer inflation forecasts for the current fiscal year to March 2023 by 1.5%, compared to the 1.1% rise in the source’s estimates.

According to sources, the board also expects to reduce its forecast of growth for fiscal year 2018, as higher raw material costs attributed the Ukraine war have hurt domestic trade.

According to the BOJ, January’s forecast is that the economy will expand by 3.8% in fiscal 2019. This figure is far more than what was projected in a Reuters poll.