Key facts
- Over 90% of Japanese households anticipate rising prices in the next year.
- The percentage of households expecting price increases in one year rose to 90.4% in June.
- Expectations for price increases in five years also climbed to 86.1%.
- Nearly half of households expect economic conditions to worsen over the next year.
A Bank of Japan survey released on Thursday indicates that inflationary expectations among Japanese households are broadening. In June, 90.4% of households anticipated rising prices a year from now, an increase from 83.7% in the previous survey. Furthermore, 86.1% of respondents expect prices to rise five years ahead, up from 82.6% in March.
As the cost of living continues to climb, the survey also revealed a significant shift in economic outlook. Nearly half of households, 49.9%, now expect economic conditions to worsen in the coming year, a notable rise from 32.8% in March. This figure represents the highest level of pessimism recorded since December 2008.
These findings will be a key consideration for the Bank of Japan when its policymakers convene for a two-day policy meeting scheduled to conclude on July 31.