Japanese firms resigned to inflation below 1% - Reuters Corporate Survey


According to results from a Reuters survey of large and medium-sized businesses in Japan, respondents are expecting inflation to remain subdued.

Key highlights

Two-thirds of respondents say inflation between 0 and 1% is "appropriate".

44% of those surveyed say the Bank of Japan's (BoJ) price goal will take longer than 3 years to attain.

27% believe that the 2% inflation target is outright unreachable.

42% are concerned about the long-term impact of ongoing trade frictions.

Key quotes from Reuters

"The survey results suggest that many companies believe Japan's economy has entered a new normal of muted inflation."

"Consumer prices have been hovering just under 1 percent for some time. A BOJ governor calls it the 'Amazon effect,' the growth of Internet retailers is keeping inflation from accelerating."

"As such, 2 percent inflation is unthinkable," said a service company manager. A machinery maker concurred: "The 2 percent inflation target is groundless. Public sentiment is such that such a target is not called for."

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