Bareksa.com - Japanese consumers turned more cautious about job security and their spending, a central bank survey showed on Thursday, in a sign that some people remain sceptical about the prospects for further improvement in the economy.

However, the quarterly survey conducted by the Bank of Japan also showed that the majority of respondents expect consumer prices to rise one year and five years from now, suggesting that inflation expectations are firmly anchored.

The diffusion index for job security and wages worsened to minus 13.0 in June from minus 11.4 in March, showing that the number of people who are very worried about their job security a year from now is increasing.

The diffusion index subtracts the number of people who are not worried about what will happen with their job from the number who say they are very worried.

The diffusion index for consumer spending eased slightly to minus 43.7 in June from minus 43.3 in March, meaning there was a small increase in the number of people who plan to cut spending a year from now.

The readings suggests the presence of underlying uncertainty about the outlook for the economy, which is expected to have slowed off sharply in the second quarter in part due to the impact of a sale tax hike in April.

Still, there were encouraging signs for the BOJ's inflation goal.

Under its "quantitative and qualitative easing" enacted in April last year, the BOJ pledged to accelerate consumer inflation to 2 percent in roughly two years via aggressive asset purchases to end 15 years of mild deflation.

BOJ Governor Haruhiko Kuroda has repeatedly expressed his confidence that Japan is on track to meet the price target, despite the doubts of many private-sector analysts that inflation will accelerate so quickly.

The survey showed that 80.6 percent of respondents expect consumer prices to rise a year from now, more than 79.9 percent in the previous survey.

Consumers expect prices to rise a median 3.0 percent a year from now, unchanged from the previous survey.

The survey for June showed that 82.4 percent of consumers expect prices to rise five years from now, down slightly from 82.9 percent in the survey for March.

Five years from now, consumer prices are expected to rise a median 2.0 percent, also unchanged from March.

The survey, which targeted 4,000 people of which 2,275 replied, was conducted as part of a quarterly poll on households to measure their sentiment on the economy and prices.

(Source : Reuters)