Bank of Japan Q3 Tankan report – Firms expect the CPI still above 2% target in 5 years

<p>The Bank of Japan Tankan report highlights that firms' inflation expectations are still very high.</p><p>
Tankan corporate price expectations survey: </p><ul><li>Japan firms expect
consumer prices to rise 2.5% a year from now vs +2.6% in prev survey</li><li>Japan firms expect
consumer prices to rise an annual 2.2% 3 years from now vs +2.2% in
prev survey</li><li>Japan firms expect
consumer prices to rise an annual 2.1% 5 years from now vs +2.1% in
prev survey</li></ul><p>Analysts comments seem to be along the lines that inflation expectations are moderating. And, if you check out the previous expectations they are. But they seem to be kidding the bigger pic, which is that expectations are still above target. Out for 5 years!!! How long is 'transitory', folks?</p><p>From the rest of the report, Headlines via Reuters:</p><ul><li>
Sept big manufacturers index +9(expected: 6)</li><li>Dec big
manufacturers index seen at +10(: 5)</li><li>Sept big
non-manufacturers index +27(expected: 24)</li><li>Dec big
non-manufacturers index seen at +21(expected: 22)</li><li>Sept small
manufacturers index -5(expected: -4)</li><li>Dec small
manufacturers index seen at -2(expected: -4)</li><li>Sept small
non-manufacturers index +12(expected: 12)</li><li>Dec small
non-manufacturers index seen at +8(expected: 9)</li><li>Japan all firms see
dollar averaging 135.75 yen for fy2023/24</li><li>Japan all firms see
euro averaging 144.62 yen for fy2023/24</li><li>Japan big
manufacturers see dollar averaging 133.91 yen for fy2023/24</li><li>Sept all firms
employment index -33</li><li>Sept all firms
financial condition index +11 vs june +11</li><li>Sept big
manufacturers' production capacity index +1 vs june +2</li><li>Japan big
manufacturers see fy2023/24 recurring profits -5.0%</li><li>Japan big firms see
fy2023/24 capex +13.6% (expected: 13.6%)</li><li>Japan small firms
see fy2023/24 capex +8.0% (expected: 4.4%)</li></ul><p>Over the weekend from Ueda:</p><ul><li><a href="https://www.forexlive.com/centralbank/boj-gov-ueda-spoke-over-the-weekend-said-still-a-distance-to-go-to-exit-loose-policy-20231001/" target="_blank" rel="follow" data-article-link="true">BOJ Gov Ueda spoke over the weekend – said "still a distance to go" to exit loose policy</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.