Japan's budding inflation expectations put BOJ in policy bind

Household relief measures complicate efforts to change how consumers think

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Japanese are witnessing the fastest pace of consumer price growth in decades. (Photo by Makoto Okada)

DAICHI MISHIMA, Nikkei staff writer

TOKYO -- After a decade of battling deflation, the Bank of Japan is on the brink of achieving its target of stable 2% inflation. But its task is being complicated by the government's efforts to ease the strain on households.

The key is inflation expectations -- what people expect inflation to be in the future. If more people expect prices to rise, then prices are more likely to actually rise.

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