MNI 5 THINGS: BOJ Tankan: Biz Short-, Long-Term CPI Outlook Up

--Dec Tankan Sees Japan Biz Medium-Term Infla Outlook Unchanged

     TOKYO (MNI) - The short- and long-term inflation outlook among Japanese

companies rose slightly from three months ago, but medium-term inflation outlook

was unchanged from September, indicating the pace of a pickup in consumer prices

will remain slow, the Bank of Japan's quarterly Tankan survey for December

showed .

     The inflation outlook follows Friday's main Tankan release, that showed

business sentiment was unchanged from three months ago, indicating that the

impact of global trade friction on businesses has so far been limited.

     However, looking ahead, sentiment among major companies is expected to

worsen on concerns over the impact of trade disputes and uncertainties over

overseas demand. Labor shortages in Japan are also pushing up costs.

     The survey, published Friday, was conducted from November 13 to December

13.

     The key points from the inflation outlook section of the Tankan follow.

     --In the December survey, companies on average saw a slightly faster pace

of increase in consumer prices for one and five years ahead, compared to the

previous survey, while leaving their inflation forecasts for three years ahead

unchanged.

     --Firms on average expect the annual consumer inflation rate at 0.9% a year

from now, up from 0.8% in September. Companies also expect a 1.2% rise five

years out, but they expect three years ahead numbers to be unchanged from

September.

     --Many companies -- 32% of those polled, (vs 33% in September) -- expect

the inflation rate to be about 1% in 12 months. The survey showed that 13% of

all firms (12% previously) projected 2% inflation a year ahead while 34% (36%

three months earlier) saw a flat inflation rate during the same period.

     --Smaller firms continued to project higher inflation than larger

corporations, as they tend to be hit harder by rising costs and a tighter labor

supply.

     --The survey showed companies on average expect sales prices to rise 0.8% a

year from now, unchanged from September. They saw an increase of 1.2% three

years ahead, down from +1.3% in September, but left their five-year sales price

forecast at 1.5%.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MAJDS$,MAUDR$,MAUDS$,MMJBJ$,MMUFE$,M$A$$$,M$J$$$,M$U$$$]