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Japanese households increasingly expect higher prices, BoJ survey shows

The BoJ survey found households project average inflation of 13.1% over the next year, up from 83.7% who expected price increases in the prior survey.

Reported · Written up by our desk · Central Banks

FXStreet reports that a June Bank of Japan quarterly survey showed a larger share of Japanese households expect prices to rise over the next year. The figure rose to 90.4% from 83.7% in the previous survey.

Households also reported inflation expectations, with the survey showing an average increase of 13.1% over one year and a median rise of 10.0%. The same survey found 86.1% of households expect prices to rise five years from now, compared with 82.6% previously.

FXStreet notes that the BoJ’s framework centers on maintaining price stability, with an inflation target of around 2%. It also references the BoJ’s shift from ultra-loose policy, including the March 2024 rate hike, after years of stimulus that contributed to yen weakness versus other currencies.

The report links the survey context to policy divergence and past yen depreciation, saying that broader factors such as higher global energy prices and the expectation of rising salaries have pushed inflation above the BoJ’s target.

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