TOKYO (Reuters) - The Bank of Japan is expected to offer a bleaker view on overseas economies and may lower its assessment on the country's exports next week, sources familiar with the matter told Reuters by Friday.
The more pessimistic outlook reflects growing pressure on the world's third-largest economy from China's slowdown and weakness in emerging Asia economies.
But the central bank is set to roughly maintain its view that Japan's economy will recover moderately on hopes that gradual wage gains will eventually boost household spending, the sources said.
"The external environment has soured, particularly for emerging Asia," one source said on condition of anonymity.
The BOJ now describes exports as "picking up, albeit with some fluctuations." It may offer a slightly gloomier view at next week's policy meeting following a slew of recent weak data, the sources said.
On the outlook abroad, the BOJ will maintain its view that advanced economies are recovering but revise down its assessment of some emerging economies where growth has been "lackluster," they said.
Japan's economy contracted in April-June and analysts expect any rebound in the current quarter to remain modest at best due to weak consumer spending and exports.
Consumer inflation ground to a halt and many BOJ officials now feel it may take longer than expected for price growth to accelerate, as the drag from slumping oil costs persists.
BOJ Governor Haruhiko Kuroda has stressed the central bank is ready to ease monetary policy further if achieving his 2 percent inflation target is threatened.
But a growing number of BOJ policymakers are wary of expanding an already radical stimulus program. That means it may take more than a temporary soft patch for the BOJ to act immediately, the sources said.
Additional reporting by Sumio Ito and Yoshifumi Takemoto; Editing by Jacqueline Wong