The Bank of Japan cut its economic growth forecast and predicted inflation would accelerate in a report that omitted a reference to raising interest rates for the first time in two years.

The world's second-largest economy will grow 1.5 percent in the year ending March 31, less than an October estimate of 2.1 percent, the central bank said in its semi-annual outlook.

"The outlook for economic activity and prices is highly uncertain," the central bank said. "It is not appropriate to predetermine the direction of future monetary policy."