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Fewer Japan households see prices rise ahead: BOJ survey

China's foreign exchange regulator has ordered banks in some trading hubs to limit dollar purchases this month, three people with direct knowledge said on Friday, in the latest attempt to stem capital outflows.

[TOKYO] Fewer Japanese households expect prices to rise in coming years compared with three months ago, a Bank of Japan survey showed, suggesting growing scepticism about the bank's stand that its massive money printing will help accelerate inflation to its 2 per cent target.

Households were also less optimistic about the economy than three months ago, the survey showed on Friday, underscoring the fragile nature of Japan's recovery.

The ratio of households that expect prices to rise a year from now stood at 77.6 per cent in December, down from 81.9 per cent in September, according to the survey.

The survey also showed the ratio of households projecting prices to rise five years ahead fell to 80.1 per cent from 83.7 per cent, a sign that slumping energy and commodity prices were hurting inflation expectations.

An index measuring households' sentiment worsened 2.1 points from September to minus 17.3, the survey showed.

Under a stimulus programme deployed in 2013, the BOJ aims to accelerate inflation to 2 per cent on hope its massive money printing will change public perceptions that deflation will persist and encourage households to spend now rather than save.

But private consumption remains weak as companies remain reluctant to boost salaries. Wages fell for the first time in five months in November on declining bonus payments, data showed on Friday.

"The marked slowdown in ... cash earnings was mostly due to a plunge in volatile bonus payments, whereas regular pay expanded rather solidly," Marcel Thieliant, senior economist at Capital Economics, wrote in a research note.

"However, much stronger gains in (labour cash) earnings will be needed to reach the BOJ's 2 per cent inflation target."

Core consumer inflation stood at 0.1 per cent in the year to November, underlining Japan's uphill struggle to foster price growth in the face of tumbling oil prices.