TOKYO (Reuters) – The percentage of Japanese households that expect consumer prices to rise a year from now reached the highest level in more than a year, a central bank survey showed on Friday, suggesting progress in generating sustained inflation.
The percentage of households that expect prices to increase five years from now also rose to the highest in a year, the survey for June showed, supporting the Bank of Japan’s optimism that its quantitative easing is gaining traction.
The survey follows government data showing a pickup in wages and other signs that consumer spending is starting to improve after a period of prolonged weakness, developments that are essential to meeting the BOJ’s 2 percent inflation target.
In June, 75.4 percent of households surveyed said the expected prices to rise a year from now, which was up for the second consecutive quarter to reach the highest since March last year, the BOJ’s quarterly survey on people’s livelihoods showed on Friday.
The percentage of households that expect prices to rise five years from now rose for the second straight quarter to 82.3 percent, the highest level in a year, the survey showed.
The BOJ’s latest survey was conducted between May 12 and June 7 with responses from 2,198 people.
(Reporting by Stanley White; Editing by Sam Holmes)