Japan households' inflation expectations weaken for the fifth straight quarter

Bank of Japan's (BOJ) latest survey regarding Japan households' inflation expectations showed on Tuesday that the ratio of households which expect prices to rise a year from now stood at 65.1 percent in September, down from 72.4 percent in June.

Japanese households' inflation expectations weakened for the fifth straight quarter to a nearly four-year low in July-September and highlighted central bank’s failure to revive economic growth, despite the massive stimulus package. BOJ's massive asset-buying program adopted in April 2013 is failing to boost stagnant economic growth.

The ratio peaked five months after the BOJ adopted its massive asset-buying program in April 2013, suggesting that BOJ Governor Haruhiko Kuroda's radical monetary experiment had only a temporary effect in heightening inflation expectations.

The survey also showed 80.1 percent of the total number of households surveyed expect inflation to pick up five years from now, down from 83.6 percent in June. As for underlying price moves, 64.5 percent said they believe prices rose from a year ago, down from 73.1 percent in June and the lowest level since June 2013.

A separate index measuring households' confidence about the economy stood at minus 23.1 in September, improving from minus 27.3 in June.

The BOJ is likely to slightly cut next fiscal year's inflation forecast in a quarterly review, sources familiar with its thinking said. However, the central bank is unlikely to ease in the near term after having just revamped its policy framework.