In fact, looking at developments in the output prices DI in the Tankan, the situation recently has taken hold in which the proportion of enterprises answering that the output prices have risen exceeds the proportion of those answering that such prices have fallen, for the first time in about 30 years since the bubble period.
Thus, as firms' and households' cautious sentiment changes and further price rises come to be observed widely, on the back of the positive output gap, the year-on-year rate of change in the CPI is likely to increase gradually toward the price stability target of 2 percent, in line with a rise in inflation expectations.