JAPANESE inflation expectations soared to a four and a half year high, figures showed yesterday, suggesting households believe Prime Minister Shinzo Abe will succeed in his attempt to get the Bank of Japan (BOJ) to boost inflation.
Three quarters of households thought prices would be higher in a year’s time, according to a BOJ survey, the highest fraction since 2008, as the conservative leader’s schemes to loosen monetary and fiscal policy – known as Abenomics – kick in.
And the past three months since Abe took over have seen three successive gains in sentiment at the big Japanese manufacturers, according to the BOJ’s widely-regarded Tankan survey, released separately yesterday. In March the measure climbed from minus 12 to minus eight, suggesting the economy will see modest recovery.
This comes as new BOJ governor Haruhiko Kuroda is set to chair his first policy meeting, at which the incoming boss is expected to pull out all the stops to try and achieve his inflation target, which Abe doubled to two per cent.
“The governor is expected to make good on his promise of pursuing bold monetary easing,” said Tatsushi Shikano at Mitsubishi UFJ Morgan Stanley.