By Yoshifumi Takemoto and Sumio Ito
TOKYO (Reuters) - The Bank of Japan is considering a slight increase in its consumer price forecasts at its next policy meeting as a rapid decline in the yen pushes up import prices, several sources with direct knowledge of the matter told Reuters.
The BOJ currently expects consumer prices to rise by 1.5 percent in fiscal 2017 and by 1.7 percent in fiscal 2018, according to forecasts it issued in November.
Any upgrade is likely to be minor when the BOJ updates its forecasts at a policy meeting on Jan. 30-31, but a recent stabilization in oil prices and a more healthy global economy are also supportive for Japanese inflation, the sources said.
"This is not just about a weak yen," one source said.
"The global economy has improved from the second half of last year and there has been an adjustment in inventories in emerging markets."
The BOJ will issue a quarterly update of its economic growth and consumer price forecasts at the meeting.
When the BOJ last issued its forecasts at the beginning of November, the dollar was trading around 104 yen.
Since then, the yen has tumbled around 10 percent due to speculation that U.S. President-elect Donald Trump's policies will spur growth and cause U.S. interest rates to rise quicker than expected.
Signs of a turnaround in Japanese exports and factory production prompted the BOJ to raise its economic outlook last month, highlighting the central bank's growing confidence that the economy will be stronger this year.
If the BOJ does raise its consumer price forecasts, it could send a signal to Japanese companies that they need to continue raising wages, one source said.
BOJ officials have often said publicly that higher wages are essential to meeting its 2 percent inflation target.
Since the BOJ started its quantitative easing in early 2013 wage gains have been subdued, and few economists are optimistic that the BOJ's 2 percent price target can be met easily.
Highlighting the difficulty of the task, core consumer prices fell 0.4 percent in November from a year earlier, down for the ninth consecutive month.
The BOJ currently keeps short-term rates at minus 0.1 percent and buys government bonds to keep the benchmark 10-year yield around zero.
(Reporting by Yoshifumi Takemoto and Sumio Ito, Writing by Stanley White; Editing by Kim Coghill)