MNI BRIEF: BOJ: Households’ 5-Yr Inflation Stays At 5%

The Bank of Japan's quarterly consumer survey released Friday showed the median inflation forecast five years ahead stood at 5%, unchanged from June, while the share of households expecting prices to rise increased to 84.8% from 83.1%. 

The median one-year-ahead forecast rose slightly to 10% from 9.9%, reflecting continued concern over high living costs, particularly for food, the survey showed. 

BOJ officials are heartened by the results as households' inflation view didn't fall despite the slowing year-on-year increase in consumer price index. The results were the similar to the Tankan survey that corporate inflation view didn't fall despite the falling prices.

The data suggest inflation expectations remain firm, although the BOJ maintains that the underlying inflation trend has yet to reach its 2% target.

The survey also showed household sentiment improving modestly, with 56.1% reporting worsened circumstances compared with 61.0% in June. The diffusion index measuring views on current economic conditions rose to -58.7 from -67.0, supported by higher wage and business income.