In the output prices DI of the Tankan survey, until recently the share of firms responding that their output prices are “falling” exceeded that responding that their output prices are “rising;” however, in the June survey the two shares were identical (Chart 14).
Thus, the mechanism in which the rise in observed inflation alters people’s inflation outlook and behavior, which in turn raises observed inflation, continues to operate. This means that people’s inflation expectations will likely follow an uptrend and inflationary pressure from the rise in inflation expectations will also increase. III.