As part of the Bank of Japan Tankan report is the corporate price expectations survey:
- Japan firms expect consumer prices to rise 2.4% a year from now vs +2.5% in previous survey.
- Expect consumer prices to rise an annual 2.2% 3 years from now vs +2.2% in previous survey.
- Expect consumer prices to rise an annual 2.1% 5 years from now vs +2.1% in previous survey.
All of those expectations are for CPI above the 2% target, all the way out to 5 years. These are only expectations, not BOJ forecasts, but the BOJ maintaining its view that above 2% inflation is only transitory seems to be getting more and more difficult to argue.
The BOJ meet next week, the statement and Ueda’s news conference is on Tuesday. Ueda is treading a careful, and thin, line between not wanting to shock markets with an abrupt policy change, and not wanting to give too much away on timing that it seems that Bank has not decided on yet (its awaiting Spring wage negotiation outcome it tells us). Last week his comments on exit were interpreted by markets. USD/JPY collapsed on Thursday in response and then bounce (not all the way) back.
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More from the report:
- December big manufacturers index +12 (Reuters poll: 10).
- March big manufacturers index seen at +8 (Reuters poll: 9).
- December big non-manufacturers index +30 (Reuters poll: 27).
- March big non-manufacturers index seen at +24 (Reuters poll: 25).
- December small manufacturers index +1 (Reuters poll: -4).
- March small manufacturers index seen at -1 (Reuters poll: -5).
- December small non-manufacturers index +14 (Reuters poll: 12).
- March small non-manufacturers index seen at +7 (Reuters poll: 8).
- Japan all firms see dollar averaging 139.35 yen for FY2023/24.
- Japan all firms see euro averaging 148.80 yen for FY2023/24.
- Japan big manufacturers see FY2023/24 recurring profits +2.4%.
- Japan big manufacturers see dollar averaging 138.30 yen for FY2023/24.
- December all firms employment index -35.
- December all firms financial condition index +11 vs Sept +11.
- December big manufacturers’ production capacity index +2 vs Sept +1.
- Japan big firms see FY2023/24 capex +13.5% (Reuters poll: 12.4%).
- Japan small firms see FY2023/24 capex +10.3% (Reuters poll: 9.2%).
The Boiler Room