However, they require caution in interpretation, as an increase in the inflation expectations may reflect the potential impacts of the consumption tax hikes. The ESP Forecast Survey excludes the tax effects from the October 2013 survey, while the QUICK Bond Monthly Survey includes the tax effects from the September 2013 survey.14 The BEI and inflation swap rates reflect the tax hikes.
The BEI indicator also reflects the differences in liquidity between fixed-rate and inflation-indexed bonds. A rising trend in long-term inflation expectations based on the ESP Forecast Survey even after excluding the tax effects is encouraging, but is still well below the 2 percent target (Charts 15 and 16).