October 5, 2018 / 5:50 AM / in 18 days

Japan households' inflation expectations weaken - BOJ survey

TOKYO (Reuters) - Japanese households’ forecasts of future price moves barely budged in recent months despite steady economic growth, a central bank survey showed on Friday.

FILE PHOTO - People walk on a street in a busy shopping district in Tokyo, Japan May 17, 2017. REUTERS/Toru Hanai/File Photo

The Bank of Japan’s quarterly survey of households’ economic circumstances survey found 76.0 percent of Japanese households expected inflation to accelerate a year from now, down from 77.4 percent in June, showed on Friday.

Some 80.6 percent of respondents said they expect inflation to pick up five years from now, down from 82.3 percent in June.

The respondents on average expected prices to rise 4.4 percent a year from now, the September survey showed, unchanged from June. They expected prices to rise 3.9 percent five years ahead, slightly down from 4.0 percent in June.

A separate index measuring households’ livelihoods worsened to minus 13.3 in September from minus 9.9 percent in June, indicating that more respondents felt they were worse off versus a year earlier.

The survey is among the key data the BOJ scrutinises when assessing the impact of its ultra-easy monetary policy.

Japan’s overall consumer prices rose 1.3 in August from a year earlier. Core consumer prices, which strip away volatile fresh food costs and closely watched by the BOJ, rose 0.9 percent - staying distant from the bank’s 2 percent target.

The inflation forecasts in the BOJ’s quarterly survey tend to be swayed by rises in fresh food prices, as households are sensitive to price swings in daily necessities.

Reporting by Leika Kihara

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