TOKYO- Japanese households’ price forecasts rose slightly in the three months to September, a quarterly central bank survey showed on Friday.
The forecast underscored the pain households are feeling from rising living costs due to imports of raw materials boosted by a weaker yen.
The survey is among key factors that the Bank of Japan (BOJ) will scrutinize in producing new inflation forecasts at its Oct. 30-31 policy review. The BOJ is expected to raise inflation projections for the current fiscal year.
The BOJ’s September survey showed 86.8 percent of Japanese households expect prices to rise a year from now, a tad higher than 86.3 percent in June.
“The survey results were rather negative to the BOJ, which appears contrary to its aim of achieving a positive growth cycle backed by solid wage growth and demand-pull inflation,” said Izuru Kato, chief economist at Totan Research.
“It confirmed that the BOJ won’t alter easy money policy for the foreseeable future, although further yen weakening could be a trigger for action, such as abolition of negative interest rates as early as January.”
The survey also found that with a weaker yen boosting the cost of living, the number of well-off householders declined while the proportion of those who are ill-off has grown.
Households expect inflation to accelerate by an average 10.7 percent a year from now from 10.5 percent seen in June, the September survey showed.
The percentage of households expecting prices to rise five years from now rose to 80.7 percent in September from 79.0 percent in June. -Reuters
