MNI BRIEF: BOJ: More Households See Hit From Rising Prices

Higher prices are impacting Japan's households at a greater rate than three months ago, the Bank of Japan's latest quarterly consumer survey shows, increasing concerns that low real incomes will weigh further on consumption levels. The number of survey respondents pointing to prices higher than a year ago stood at 94.3% in December, up from 91.8% in September, with the average rate rising to 12.1% from 10.3%.

However, looking five years ahead, 76.7% of respondents said prices would rise, down from 78.3% three months earlier. Respondents expecting prices to rise next year stood at 85.0% in December, down from 85.7% in September. Just 6.5% of respondents expect prices to fall, up from 5.5% in September. The diffusion index gauging household sentiment on current economic conditions fell 3.4 points to -61.8 in December, as many respondents pointed to worsening conditions.

With inflation continuing to push higher, data this week showed prices in Tokyo at a 40 year high, the Bank of Japan continues to pursue easy monetary policy, as it seeks to bake in sustainable inflation around its 2% target. (MNI POLICY: BOJ To Raise FY23 CPI, Stick With Base 2% View)