Looking ahead, as the Bank pursues “QQE with a Negative Interest Rate” and the observed inflation rate rises, medium- to long-term inflation expectations are also likely to follow an increasing trend and gradually converge to around 2 percent – the price stability target.
Against this backdrop, firms’ wage- and price-setting stance is likely to shift further toward raising wages and prices, and with an acceleration in wage increases, inflation rates are expected to rise gradually.