MNI BRIEF: BOJ: H’hold 5-Yr Inflation At 5% On Higher Prices

Japanese households' median inflation forecast five years ahead stood at 5%, unchanged from three months ago, but the number of households who expect price to rise to 82.0% from 80.6%, the BOJ's latest quarterly consumer survey showed.

The data, a key indicator for BOJ officials, showed households’ median inflation view a year ahead stood at 10%, up from 5% three months ago, as higher real prices push expectaions higher. The survey results are increasing pressure on policymakers to raise interest rates further, but the BOJ remains cautious as the underlying inflation trend hasn’t yet reached 2%.

The survey showed that the number of households who saw circumstances worsened from three months ago rose 55.7% from 49.5% in March, with higher prices the main reason. The diffusion index on households' sentiment on current economic conditions fell 13.7 points to -49.8, with more people saying sentiment had worsened, judging from income levels and media reports., the survey showed.