Japanese companies have cut their inflation forecasts for the next five years, indicating that even after adopting a negative-rate policy, the Bank of Japan is struggling to persuade businesses that sustained price gains will take hold.
Companies are projecting 1.2 percent inflation in five years time, down from the 1.4 percent estimated in December, according to a BOJ report for March released Monday. In three years, they expect 1.3 percent price growth, and 0.8 percent in one year.
The cuts reflect weak corporate sentiment, which last month dropped the most since just before Gov. Haruhiko Kuroda launched his unprecedented stimulus program three years ago.
Credit Suisse Group and Capital Economics are among those projecting additional action by the BOJ later this month.
"There is no sign of clear improvement in the inflation outlook among companies," Daiju Aoki, an economist at UBS Group, said before Monday's report was released. "They are worried about a strong yen and volatile markets."
The inflation outlook among companies across all industries has not surpassed the level marked since the BOJ began collecting the data in March 2014.