UPDATE 1-Bank of Japan may signal near-term rate hike with new price forecasts

The Bank of Japan on Friday is set to project inflation will stay near its 2% target in coming years and signal its readiness to raise interest rates from near-zero, in hope of keeping yen bears from pushing the currency to fresh 34-year lows. Recent threats of intervention by Japanese authorities have failed to arrest the yen's slide against the dollar to levels unseen since 1990, adding to headaches for policymakers worried about the hit to consumption from rising living costs.