TOKYO - The percentage of Japanese households expecting inflation to accelerate a year from now hit a three-and-half year high, offering policymakers hope a sustained economic recovery will help the central bank achieve its elusive 2 percent price goal.
But more households complained that economic conditions were worse than a year ago, the central bank's quarterly survey found on Friday, underscoring the challenge policymakers face in driving up inflation without denting consumption.
The Bank of Japan's survey on people's livelihood showed the percentage of households who expect prices to rise a year from now was 78.7 percent in March, up from 77.5 percent in December and the highest level since September 2015.
Among the surveyed households, 82.3 percent said they expect inflation to pick up five years from now, up from 80.8 percent in December.
A slew of price rises announced by some companies may have affected households' inflation expectations, as well as a rebound in fuel costs, a BOJ official told reporters.
A separate index measuring households' perceptions of the economy's performance worsened to minus 19.2 in March from minus 14.3 percent in December, indicating that more respondents felt they were worse off compared with one year earlier.
The survey, conducted between Feb. 7 and March 5, is among key data the BOJ looks at in assessing the impact of its ultra-easy monetary policy.