TOKYO (Reuters) – Japanese domestic inflation expectations hit an eight-year low in the three months to December, a central bank study on Tuesday showed, suggesting a coronavirus pandemic has increased devastating risks in the third-largest economy world.
The result highlights the challenge facing the Bank of Japan in firing inflation to their 2% target, and keeping it under pressure to support an economy hit by a post-crisis state. out again to combat the pandemic.
The ratio of households expected to rise in prices a year from now was now at 60% in December, down from 63.3% in September and hitting the lowest level since December 2012, a quarterly survey showed BOJ on homes.
In a sign that detoxification pressure was already rising, the ratio of people who thought prices had risen from a year ago fell to 60.5% in December from 65.9% in September, showed e.
Household sentiment about the state of the economy improved sharply but fell near lows in 2009, as Japan was recovering from a global financial crisis that prompted the collapse of Lehman Brothers, according to the study.
Nearly 90% of households reported a decrease in the number of trips for recreation and entertainment compared to March last year, when the coronavirus began to spread.
About 67% said they plan to ban leisure and entertainment trips, and 71% said they don’t plan to change what they spend to enjoy the time they spend at home .
Japan is expected to extend a state of emergency from the Tokyo metropolitan area to other regions as COVID-19 cases escalate, a move that could increase the risk of a double-dip recession and hurt prices by cooling domestic demand.
Prime consumer prices fell 0.9% in November from a year earlier, the fastest decline in a decade.
Reciting with Leika Kihara; Edited by Chris Gallagher and Sam Holmes