Japan households' inflation expectations hit 3-year low: BOJ

[TOKYO] Japanese households' inflation expectations weakened in January-March to levels before the Bank of Japan deployed its massive asset-buying programme three years ago, a central bank survey showed, keeping alive expectations of additional monetary stimulus.

The ratio of households who expect prices to rise a year from now stood at 75.7 per cent in March, down from 77.6 per cent in December and the lowest level since March 2013, the BOJ's quarterly survey on people's livelihood showed on Monday.

Eighty per cent of the total number of households surveyed expect inflation to pick up five years from now, down slightly from December, the survey showed. That level was the lowest since December 2012.

A separate index measuring households' confidence about the economy stood at minus 22.5 in March, worsening from minus 17.3 in December to the lowest level since March 2015.

The index subtracts the ratio of households who feel economic conditions have worsened from those who believe they have improved. A negative reading means more households feel economic conditions have deteriorated.

The BOJ adopted its massive asset-buying programme, dubbed"quantitative and qualitative easing," in April 2013 to accelerate inflation to its ambitious 2 per cent target in a country mired in 15 years of deflation.

Japan's central bank stunned markets in January by deciding to add negative interest rates to QQE in a fresh attempt to reflate the economy out of stagnation.

But the move has failed to arrest an unwelcome spike in the yen or boost business confidence, keeping alive market expectations the central bank may top up stimulus again in the coming months.

REUTERS