TOKYO: The proportion of Japanese households expecting prices to rise a year from now has hit a 14-year high, a central bank survey showed on Thursday, as inflationary pressures from rising raw material costs grew.
The quarterly survey also showed more households felt worse off than three months ago as prices of food and daily necessities rose, highlighting the pain global commodity inflation was inflicting on Japan's fragile economy.
Of households surveyed, 84.3% expect prices to rise a year from now, up from 78.8% three months ago and marking the highest percentage since June 2008, the Bank of Japan's survey showed.
The survey, conducted between Feb. 4 and March 2, also showed 82.1% of households expect prices to rise five years from now.
That was up from 80.8% in the previous survey in January and the highest ratio since December 2019.
A diffusion index measuring households' livelihoods worsened to minus 36.9 in March from minus 34.2 in December, with many of those surveyed blaming the pinch from rising grocery prices.
Japan has not been immune from surging fuel and commodity prices with wholesale inflation hitting record highs.
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Analysts also expect consumer inflation to hit or even exceed the BOJ's 2% inflation target as early as this month.
Unlike central banks in other advanced economies that are hiking interest rates to dampen inflationary pressures, the BOJ has little room to manoeuvre as Japan's economy is still struggling to recover from a pandemic-induced slump.
The survey is among data the BOJ will likely analyse at this month's policy meeting to see whether rising raw materials and fuel costs have affected public perceptions of future price moves, and how that may impact consumer spending.
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