Japan households' confidence hits 8-year high, inflation expectations rise
More households saw income shrink and expect to slash expenditure a year from now, the survey showed, underscoring the patchy nature of Japan’s recovery
Japanese households' inflation expectations rose in March from three months ago and their confidence on the economic outlook improved to an eight-year high, a central bank survey showed, a sign the initial pain from the coronavirus pandemic was heeling.
The outcome offers some relief to policymakers struggling to balance the need to prevent a resurgence of Covid-19 infections while sustaining a moderate economic recovery.
The ratio of households which expect prices to rise a year from now stood at 62.4% in March, up from 60% in December, the Bank of Japan's survey showed on Wednesday.
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A diffusion index measuring households' confidence on the economy a year from now stood at minus 8.5 in March, recovering sharply from minus 23.1 in December and marking the highest level since June 2013, the survey showed.
The poll follows a separate BOJ survey that showed business confidence improving to pre-pandemic levels in the first quarter as the economy benefited by robust global demand.
While the economy may have emerged from the pandemic's initial hit, a resurgence in infections and weak wage growth cloud the outlook for consumption.
More households saw income shrink and expect to slash expenditure a year from now, the survey showed, underscoring the patchy nature of Japan's recovery.
The survey will be among factors the BOJ will scrutinise when it conducts a quarterly review of its growth and price forecasts at its next rate review on April 26-27.
