The central bank's latest inflation outlook for the year starting April stands at 2.8%, in the last report released in October. Recent falls in crude oil prices would prompt the downgrade in the new report due on Jan. 23, Jiji said without citing a source.

BOJ Governor Kazuo Ueda has pledged to keep the central bank's ultra-loose monetary policy intact until wage increases become widespread enough to keep inflation sustainably around its 2% target.

(Reporting by Kantaro Komiya; Editing by)