The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan March 18, 2024.
TOKYO: Nearly 86 per cent of Japanese households expect prices to rise a year from now, a quarterly survey showed on Thursday, a sign of heightening inflation expectations that could help the central bank make the case for additional interest rate hikes.
The ratio of households that expect prices to rise a year from now stood at 85.6 per cent in September, down from 87.5 per cent in the previous survey taken three months ago, a survey by the Bank of Japan (BOJ) showed.
Of the total households surveyed, 83.6 per cent said they expect prices to rise five years from now, up from 82.0 per cent in the previous survey in June.
In a sign of the pain of rising living costs, food and daily necessities topped the list of items the respondents said they increased spending on compared with a year ago.
Dine-outs, clothing and travel were the top three items households reduced spending for compared with a year before, the survey showed.
The BOJ ended negative interest rates in March and raised short-term borrowing costs to 0.25 per cent on the view Japan was making progress towards durably achieving its 2 per cent inflation target.
Japan’s core consumer inflation hit 2.8 per cent in August, exceeding the BOJ’s 2 per cent target for well over two years, keeping alive expectations for further interest rate hikes.
