MNI DATA IMPACT: BOJ Sep Tankan: Biz CPI Outlook Unchanged

--BOJ Sept Tankan: Firms 1-Yr Inflation Rate at 0.9%; 0.9% in June

--BOJ Sept Tankan: Firms 3-Yr Inflation Rate at 1.0%; 1.0% in June

--BOJ Sept Tankan: Firms 5-Yr Inflation Rate at 1.1%; 1.1% in June

     TOKYO (MNI) - The inflation outlook among Japanese companies was unchanged

from three months ago, indicating any pickup in consumer prices will remain

muted, the Bank of Japan's quarterly Tankan survey for September released

Wednesday showed.

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

that business sentiment, mainly manufacturers, fell broadly from three months

ago, hit by China's slowing economy and the intensified trade tensions.

     But the survey also showed capital investment plans by major and smaller

firms in this fiscal year were above historical averages, easing BOJ concern

that the virtuous cycle from profits to spending will stall.

     The survey was conducted from Aug. 28 to Sept. 30.

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

     --In the September survey, companies on average saw the pace of increase in

consumer prices for one-, three- and five-years ahead unchanged, compared to the

previous survey.

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

from now. Companies also expect a 1.0% rise three years and five years ahead the

see them unchanged at 1.1%.

     --The survey results will prompt the BOJ board to maintain its current view

that inflation expectations are more or less unchanged.

     --Many companies -- 30% of those polled (vs 31% in June) -- expect the

inflation rate to be about 1% in 12 months. The survey showed that 14% of all

firms (14% previously) projected 2% inflation a year ahead while 34% (32% 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 0.6% a

year from now, down from 0.7% in June. They saw an increase of 1.0% three years

ahead, also down from 1.2% in June and they saw an increase of 1.3% five year

sales price, also down from 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

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