Rising prices may be starting to put pressure on Japanese households, leading to a reduction in non-essential expenditures. A survey released by the Bank of Japan on Monday revealed that respondents have cut back on spending for dining out, clothing, and travel compared to a year ago. At the same time, the survey indicated that their spending on other daily necessities, such as food and detergent, has increased compared to the previous year. The central bank is scheduled to hold a policy meeting next week. Despite heightened inflation risks, overnight index swaps market pricing implies only an 18% probability of an interest rate hike in April.
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