Rice Prices Key to Japan Inflation Expectations

Dow Jones13:43

0543 GMT - Rice prices could be one of the key factors determining Japan's inflation trends, Barclays economists say. Because households purchase rice frequently, price changes strongly shape their inflation perceptions. "A sharp fall in rice prices could partly offset" an anticipated rise in household inflation expectations as nationwide inflation accelerates, they say. "Because underlying inflation is central to the BOJ's logic for justifying further rate hikes, developments in rice prices from October onward and their impact on household inflation expectations warrant close attention," they say. Barclays' composite measure of inflation expectations stood at 1.97% in the July-September quarter, hovering near the central bank's 2% target. Nationwide consumer price data for September is due Friday.

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