Firms expect consumer prices to rise 1.5 percent in a year: BOJ tankan

Commercial buildings and retail stores stand illuminated at night in the district of Akihabara in Tokyo, Japan.
Noriko Hayashi | Bloomberg | Getty Images

The Bank of Japan's March tankan showed firms surveyed expect consumer prices to rise an average 1.5 percent a year from now in a sign it could be somewhat difficult to meet the central bank's price target, a detailed survey showed on Wednesday.

The survey also showed that firms expect consumer prices to rise an annual 1.7 percent three years from now and five years from now.

Read MoreNo better time to hike sales tax: Mr Yen

The BOJ decided to start surveying companies' inflation expectations from the March tankan, excluding the impact of an April 1 sales tax hike, to give central bankers more information to guide monetary policy.

The BOJ has kept monetary policy steady since deploying an intense burst of stimulus in April last year, when it pledged to double base money via aggressive asset purchases to accelerate consumer inflation to 2 percent in two years.

Read More Japan business sentiment improves a touch: Tankan

The data on corporate inflation expectations comes one day after a summary of the tankan showed that business sentiment barely improved in the three months ending March and the outlook is now considerably weaker than when Japan last raised its sales tax in 1997.