A view of a vegetable stand with prices at a supermarket in Tokyo, Japan, on Mar 24, 2023. TOKYO: Nearly 90 per cent of Japanese households expect prices to rise a year from now, a quarterly central bank survey showed on Friday , a sign of heightening inflation expectations that could help make the case for a near-term interest rate hike.
Of the total households surveyed by the BOJ, 87.5 per cent of households said they expect prices to rise a year from now, up from 83.3 per cent in previous survey in March and marking the highest level in 16 years. "Some firms are starting to signal that they will keep passing on rising costs to retain stable source of revenues to continue hiking pay," according to the survey.
Japan's core inflation remains above the BOJ's 2 per cent target for more than two years and is expected to hit 2.7 per cent in June, according to a Reuters poll, accelerating from 2.5 per cent in May. Soft consumption could emerge as a factor that discourages the BOJ to raise rates too soon, some analysts said.