In addition, the scheduled consumption tax hikes (an increase from 5 to 8 percent in April 2014 and an increase from 8 to 10 percent in October 2015) are likely to further raise “households’ short-term” inflation expectations, if the effects of these consumption tax hikes are factored in sufficiently.
“Households’ medium- to long-term” inflation expectations will increase further if the term for these expectations covers the period in which the two tax hikes occur, but if the term covers a longer period of time the effects of the tax hikes will be diluted.