TOKYO - Japanese companies’ expectations for inflation over the next year stagnated, a Bank of Japan survey showed on Tuesday, adding pressure on the central bank to expand stimulus as the bitter U.S.-China trade war clouds economic prospects.
Firms expect consumer prices to have risen by an annual 1.0% three years from now, down slightly from 1.1% in the previous survey. Companies also saw inflation at 1.1% five years ahead, unchanged from three months ago. “There’s also no change to Japan’s deflationary structure created by a mix of a lack of demand and excess capacity.”
With capital expenditure holding up and non-manufacturers’ sentiment improving, the BOJ likely sees few reasons to ramp up monetary support for the economy immediately, analysts say.
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