MNI BRIEF: BOJ Tankan: Business Inflation Expectations Solid
MNI (TOKYO) - Japanese company inflation expectations one-, three- and five-years out remained solid over the last three months, supporting the Bank of Japan's view that the relationship between prices and wages continues to change, the BOJ December Tankan survey released on Friday showed.
Bank officials were heartened by solid inflation expectations and sales prices, and they are focused on how pass-through of cost increases, including high labour costs, continue in or after January.
On average, companies saw the annual consumer inflation rate at 2.4% in December, unchanged from September. They also saw a rise of 2.3% three years ahead and a 2.2% rise in five years, both unchanged from three months ago.
The survey showed companies on average expect sales prices to rise 2.8% a year from now, also unchanged.
They also saw an increase of 4.2% three years ahead, up from 4.1% in September, and an increase of 5.0% in five years to sales prices, up from 4.9%.
The results showed solid corporate appetite to raise retail prices on the back of high labour costs, which in turn will strengthen the wage-price virtuous cycle.