Japanese Companies Cut Inflation Expectations
Japanese companies' expectations for inflation over the next year declined slightly. According to the Bank of Japan’s survey, companies expect consumer prices to have risen 0.8% a year from now, slightly below their projection of a 0.9% increase three months ago. Firms expect consumer prices to have risen by an annual 1.1% three years from now and 1.1% five years ahead, unchanged from three months ago.
The nationwide core consumer price index in Japan, which includes oil products but excludes volatile fresh food costs, rose a modest 0.9% yoy in August, remaining distant from the central bank's 2% target.
According to the Bank of Japan’s tankan survey, which was released yesterday, business sentiment among large manufacturers worsened for the third straight quarter. The key index measuring confidence among companies such as automobile and electronics makers stood at +19 in September, down two points from June. The result was weaker than the average market forecast of +22.
On its September’s meeting, the central bank of Japan kept monetary policy steady. Bank of Japan Governor Haruhiko Kuroda said the BoJ made this decision in response to fears over the side-effects of its prolonged easing. The BoJ's next policy meeting ends on October 31.