9 Jul 2013
Flash: Japanese signals preluding higher inflation? – UBS
FXstreet.com (New York) - According to Research Analyst Gareth Berry at UBS, “Japan's reflationary policies are starting to boost consumer inflation expectations and lending activity.”
“That's the message from two reports published overnight and on Friday, both of which keep us firmly in the bearish yen camp. Inflation fears have not been so high since the oil price spike of 2008, a time when core inflation peaked at +2.4% YoY.” Berry adds.
A total of 80.2% of consumers now think prices will rise this year, either 'a little' or 'significantly'. This is the first quarterly inflation survey carried out by the BoJ since Governor Kuroda was appointed and suggests consumers are taking the policy agenda seriously. Whether they react with increased spending is of course a different matter and the jury is still out on that one, but rising inflation expectations are a first step towards a higher actual inflation rate.
“That's the message from two reports published overnight and on Friday, both of which keep us firmly in the bearish yen camp. Inflation fears have not been so high since the oil price spike of 2008, a time when core inflation peaked at +2.4% YoY.” Berry adds.
A total of 80.2% of consumers now think prices will rise this year, either 'a little' or 'significantly'. This is the first quarterly inflation survey carried out by the BoJ since Governor Kuroda was appointed and suggests consumers are taking the policy agenda seriously. Whether they react with increased spending is of course a different matter and the jury is still out on that one, but rising inflation expectations are a first step towards a higher actual inflation rate.