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According to a report released on Tuesday by the BOJ, expectations concerning inflation fell to a minimum since the end of 2012. At that time Shinzo Abe took a chair of the Prime Minister. These data show that problems with realisation of the government project directed for economic growth continue.
The BOJ surveyed 2,300 randomly selected people, and 72.4% expect prices to be higher in a year. These surveys are usually made each quarter. A year ago, 75.5% expected prices to be higher.
The latest survey fixed a minimum level of expectations concerning outlooks of growth since December 2012. At that time Shinzo Abe promised to solve deflation as soon as possible. Only 53.0% of people expected growth of prices at that time.
A pressure on the BOJ towards further steps of stimulation strengthens. Experts have confidence that the BOJ will ease monetary policy and cut rates, or expand asset programme at the next meeting scheduled for July 29. There is an opinion that both options will be implemented. It is also expected that the BOJ will stimulate in autumn a fiscal policy by 10 trillion yens or higher.
BOJ members say that the real dynamics will initiate the growth of scepsis among people concerning inflation outlooks. Retail sales fell in May by 0.4% which is the most significant fall since April 2013. At that time, the BOJ launched its significant asset purchase programme. Even excluding prices for energy, inflation remains weak as companies had a careful approach to growth of producer prices.