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The Bank of Japan in January\u00a0raised its economic growth forecast<\/a>\u00a0for the fiscal year ending March 2026 to 0.9% from 0.7%. It also lifted its fiscal 2026 outlook to 1% from 0.7%.<\/p>\n The central bank said it expects moderate expansion as other countries return to growth. The BOJ also said it sees a virtuous cycle of rising prices and wages, supported by the government’s economic measures and accommodative financial conditions.<\/p>\n The data also comes as Japan works with the U.S., its second-largest trading partner, on a $550 billion investment pledge under its trade deal with Washington.<\/p>\n Public broadcaster NHK reported<\/a> last Friday that Tokyo and Washington have yet to agree on the first projects tied to the pledge. <\/p>\n Japan Economy Minister Ryosei Akazawa was quoted as saying he hoped the initial projects would be finalized before Prime Minister Sanae Takaichi meets U.S. President Donald Trump.<\/p>\n Trump had announced the meeting with Takaichi just before the Feb. 8 Lower House election, which saw Takaichi lead the ruling Liberal Democratic Party to a landslide victory<\/a>.<\/p>\n After her victory, Takaichi said<\/a> last Monday that she would support economic growth by boosting investment through “proactive” fiscal policy, although she did not elaborate. <\/p>\n She had earlier pledged to suspend food taxes for two years and boost defence spending to 2% of the country’s GDP.<\/p>\n Defense will be the next major catalyst driving Japanese equities higher, said Bruce Kirk, Chief Japan Equity Strategist and managing director at Goldman Sachs. <\/p>\n Speaking to CNBC’s “Squawk Box Asia<\/a>,” Kirk pointed to Takaichi’s upcoming meeting with Trump, saying he expects a “flurry of announcements” involving Japanese and U.S. companies across areas such as industrialization, factory automation, and shipbuilding. <\/p>\n Kirk also highlighted a document released<\/a> by the Trump administration over the weekend that called for the restoration of U.S. maritime dominance and touted cooperation with Japan and South Korea in revitalizing shipbuilding.<\/p>\n