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Japan households see prices rising more a year from now
-survey
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Prices are seen up five years from now
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More time needed to turn cost-push inflation into
demand-pull
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Inflation expectations in focus as wage hikes, prices in
uptrend
(Adds detail, background)
By Tetsushi Kajimoto
TOKYO, April 12 (Reuters) - More Japanese households are
expecting prices to rise a year from now, a Bank of Japan survey
showed, reflecting stubborn inflation and heaping pressure on
the central bank to adjust or ditch its yield curve control.
Speculation has been rife in markets that the BOJ may soon
phase out yield curve control (YCC), a prolonged policy that
caps the 10-year bond yield around zero, which has fuelled
worries about side-effects and market distortions.
The BOJ's quarterly survey on households is among data
closely scrutinised by the central bank to determine the outlook
for inflation.
The survey results will likely keep alive speculation over
the BOJ's moves, given prospects for higher wage growth and
broader price hikes that raise living costs for households and
businesses.
Although inflation has nearly doubled the BOJ's 2% target,
the central bank has repeatedly said it was not the kind of
desirable inflation driven by private demand and wage growth.
Rather, what's causing prices to rise in Japan is cost-push
inflation, it said.
The survey showed that the ratio of Japanese households
expecting prices to rise a year from now stood at 85.7% in
March, rising from 85.0% in December.
The ratio of households expecting prices to rise five years
from now came to 75.4%, versus 76.7% three months ago.
To help households offset the increase in living costs,
major firms have offered wage hikes of 3.8% this year in annual
labour talks, the fastest pace in about three decades.
The BOJ relies on YCC policy to guide the 10-year government
bond yield around 0% as part of efforts to sustainably and
stably achieve its 2% inflation target.
(Reporting by Tetsushi Kajimoto; Editing by Jacqueline Wong)
