The Bank of Japan on Friday cut its growth outlook for the world's third-largest economy and pushed back the timeframe for reaching a key inflation target, as the country's economy stalls.

The central bank said it now expected growth to come in at 1.2 percent in the fiscal year to March 2016, down from an earlier 1.7 percent projection.

It also forecast it would reach its two percent inflation target in the six months ending March 2017 -- about half a year later than previously expected.