By Leika Kihara
TOKYO -Japanese households’ inflation expectations strengthened in the three months to June, with the ratio expecting price rises over the coming year hitting the highest level in 14 years, a central bank survey showed on Wednesday.
The ratio of households expecting prices to be higher a year from now stood at 87.1% in June, the quarterly Bank of Japan (BOJ) survey showed, up from 84.3% in March and marking the highest level since June 2008.
The ratio of households expecting prices to be higher in five years was 79.8% in June, compared with 82.1% in March. Just 3.5% expected prices five years later to be lower, the survey showed.
The results followed a separate quarterly BOJ survey that showed a spike in corporate inflation expectations.
As part of efforts to pull Japan sustainably out of deflation, the BOJ has deployed massive monetary stimulus since 2013 to push inflation to its 2% target.
After failing to achieve the goal for nearly a decade, the BOJ is finally seeing consumer inflation exceeding 2% but for the wrong reasons – soaring fuel and raw material costs blamed on the Ukraine crisis.
BOJ Governor Haruhiko Kuroda has said the bank will not withdraw monetary stimulus in response to such cost-push inflation, because it will likely prove temporary.
(Reporting by Leika Kihara; Editing by Clarence Fernandez and Bradley Perrett)