Japanese Household Inflation Expectations Highest Since 2006

JAKARTA - Japanese household inflation expectations rose to the highest level since the Bank of Japan used the current survey method in 2006. The average respondent expects prices to rise 10.8 percent per year in the next five years.

Anadolu Agency quoted Thursday, July 16, saying the figure increased from 10.3 percent in the previous quarter's survey and 9.8 percent in December.

Even though the average is up, the median or the middle value of inflation expectations remains at 5 percent.

The survey showed that 51.3 percent of respondents expected prices to rise sharply in the next five years. The figure increased from 46 percent in March.

A total of 34.8 percent of other respondents predicted that prices would rise slightly. Overall, 86.1 percent of respondents saw prices would be higher in the next five years.

For the next year, 90.4 percent of respondents also predicted prices to rise. Of these, 40.5 percent predicted a sharp increase.

The survey also noted that the proportion of households who considered interest rates too high increased to a record 24 percent from 22 percent in March.

Conversely, 33.3 percent of respondents assessed that interest rates were still too low. As many as 40.8 percent considered the current interest rate to be appropriate.

The survey was conducted from May 7 to June 9 on 4,000 people aged 20 and over. The Bank of Japan received 2,031 valid answers.

The results came after the Bank of Japan raised its benchmark rate to 1 percent in June. That level is the highest since 1995.