TOKYO: Nearly 80% of Japanese households expect inflation to accelerate a year from now to its highest in more than two years, a central bank survey showed on Tuesday, a sign the rising cost of living was starting to change public perceptions of future price moves.
The survey, which was conducted between Nov. 5 and Dec. 1, also showed more households expect prices to rise five years from now compared with the previous survey in September.
The results offer some hope for the Bank of Japan's effort to prop up inflation to its 2% target, partly by changing public perceptions about persistent deflation, with a wall of money.
The BOJ's quarterly survey showed the percentage of households who expect prices to rise a year from now stood at 78.8%, up from 68.2% in the September poll and hitting the highest level since September 2019.
Of the total, 80.8% said they expect prices to rise five years from now, up from 78.1% in the previous survey and the highest level since December 2019.
The survey is among the data the Bank of Japan will likely scrutinise at next week's policy meeting to judge whether rising raw material and fuel costs have affected households' inflation expectations.
Japan has not been immune to the impact of global commodity inflation, with wholesale prices rising a record 9.0% in November from a year earlier.
But core consumer inflation stood at just 0.5% in November as the hit to consumption from the coronavirus pandemic and slow wage growth discourages firms from passing on higher costs to households.
Some analysts expect core consumer inflation to exceed 1.5% around April, as the drag from last year's cellphone fee cuts taper off and past rises in oil costs push up electricity bills.
Many BOJ policymakers view any such rise in inflation as unsustainable unless accompanied by steady wage gains, pointing to Japan's sticky deflationary sentiment.
BOJ Governor Haruhiko Kuroda has said the central bank will maintain monetary policy ultra-loose until 2% inflation is achieved, even as its counterparts such as the US Federal Reserve eye an exit from crisis-mode stimulus measures.
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