Japanese consumers’ inflation expectations remained at 3 percent for a second quarter in June, in a sign that Bank of Japan Governor Haruhiko Kuroda’s reflationary drive may be succeeding.
People expect prices to climb 3 percent over the next 12 months, the same as in March, according to the median result in a Bank of Japan survey released today in Tokyo. The indicator doesn’t include the effects of a planned increase in the sales tax to 8 percent in April from the current 5 percent.
Kuroda is counting on unprecedented monetary easing to encourage spending and credit demand. The nation is still far from achieving the bank’s 2 percent inflation target in 2 years, with consumer prices falling or unchanged in the 13 months through May.
“Japan’s deflation will turn into inflation,” Shuichi Obata, senior economist at Nomura Securities Co. in Tokyo, said. “The problem is reaching the inflation target in 2 years.”
Banks including Mitsubishi UFJ Financial Group Inc. raised mortgage rates for a third straight month in July. McDonalds Holdings Co. Japan announced this week it would sell a limited range of burgers at 1,000 yen ($9.97), its most expensive ever offering.
The survey is conducted quarterly and includes questions on economic conditions, consumption and employment. It’s one of several indicators of inflation expectations and was conducted from May 10 to June 5, with 2,273 people responding.
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