6 - 8 cy06 - 10 cy 06 note : in the right - hand chart, figures are the producer price index ( ppi ) for all commodities ( adjusted to exclude the effects of the consumption tax hike ). sources : bloomberg ; bank of japan. chart 7 ii. price developments price developments japan's cpi excluding temporary factors consumer prices y / y % chg. 1. 5 y / y % chg. japan ( cpi ) united states ( cpi ) 1. 0 euro area ( hicp ) 0. 5 0. 0 - 1 - 2 cy19 - 0. 5 cy 16 notes : 1. in the left - hand chart, figures for japan are the cpi for all items excluding fresh food. 2. in the right - hand chart, figures are staff estimates and exclude ( 1 ) the effects of the consumption tax hike and policies concerning the provision of free education, ( 2 ) the effects of the " go to travel " campaign, which covers a portion of domestic travel expenses, and ( 3 ) mobile phone charges, from the cpi ( all items less fresh food and energy ). sources : haver ; ministry of internal affairs and communications. chart 8 ii. price developments outlook for prices the bank's forecasts for cpi ( all items less fresh food ) inflation expectations 2. 5 y / y, ann. avg., % y / y % chg. households ( over the next 5 years ) 2. 0 firms ( 5 years ahead ) market participants ( quick, 2 to 10 years ahead ) fy 2022 + 0. 9 % fy 2023 + 1. 0 % 1. 5 fy 2021 + 0. 0 % 1. 0 0. 5 0. 0 cy 10 11 12 13 14 15 16 17 18 19 20 21 - 1 - 2 fy 15 notes : 1. in the left - hand chart, figures for households are from the opinion survey on the general public's views and behavior, estimated using the modified carlson - parkin method. figures for firms show the inflation outlook of enterprises for general prices ( all industries and enterprises, average ) in the tankan. 2. in the right - hand chart, figures exclude the direct effects of the consumption tax hike in april 2014. percentage figures indicate the medians of the policy board members'forecasts ( point estimates ) presented in the october 2021 outlook report. sources : bank of japan ; quick, " quick monthly market survey < bonds > "

march 27, 2024 bank of japan economic activity, prices, and monetary policy in japan speech at a meeting with local leaders in aomori tamura naoki member of the policy board ( english translation based on the japanese original ) i. economic activity and prices a. economic activity i will begin my speech by talking about recent developments in economic activity in japan. the bank of japan assesses that the economy has recovered moderately, although some weakness has been seen in part. i would like to raise two points that i am concerned about recently. the first is about developments in private consumption. despite high prices, private consumption has continued to increase at a moderate pace, due in part to pent - up demand from the covid - 19 pandemic ( chart 1 ). however, consumption of nondurable goods, such as food and clothes, has followed a decreasing trend in real terms after excluding price rises, reflecting a recent shift toward inexpensive products. my understanding is that consumption has started to show signs of waning, owing to high prices, as an increase in wages has not been catching up with price rises. the second concern is about business fixed investment. on the back of corporate profits having been at high levels on the whole, the business fixed investment plans for fiscal 2023 in the tankan ( short - term economic survey of enterprises in japan ) indicate that investment is likely to increase clearly ( chart 2 ). meanwhile, the actual data for fixed investment in the gdp statistics up to december 2023 somewhat lack strength, even taking into account that the normal assumption is that actual data decline from the projection. on the other hand, the remaining orders for machinery and construction have chart 1 : private consumption consumption activity index nominal wages 110 s. a., cy 2019 = 100 6 y / y % chg. nominal wages cpi ( less imputed rent ) cy 19 total real private consumption services nondurable goods - 2 - 4 cy19 notes : 1. in the left panel, figures for " total real private consumption " are for the real consumption activity index and are based on bank staff calculations. the figures exclude inbound tourism consumption and include outbound tourism consumption. 2. in the right panel, figures for " nominal wages " are based on continuing observations following the sample revisions. sources : ministry of health, labour and welfare ; ministry of internal affairs and communications ; bank of japan. chart 2 : business fixed investment planned and actual investment remaining orders y / y % chg. 40