TOKYO, Reuters – Japanese consumers had their inflation expectations at a new record in March. This was due to a rise in food and energy costs that are being blamed for the Ukraine crisis.

Analysts say that while increasing inflation expectations may help Bank of Japan (BOJ), achieve its impossible 2% target price, the danger is that rising raw material prices could slow consumption and affect the wider economy without wage increases.

According to the survey, consumers had 2.67% inflation expectations in March, up from 2.43 in February. This was their highest reading since 2014.

The survey found that 15.5% of respondents expected prices to increase by around 3 percent a year, an increase from 13.7% in February. This is the highest percentage since 2019.

Survey was taken between March 3-7.

The BOJ’s years of printing money have not resulted in inflation reaching its target of 2%. This is because of weak consumer spending, which has prevented firms from increasing prices to scare away potential buyers.

Inflation has risen to four-decade levels, and companies are now passing the costs onto households. Due to rising energy costs, analysts expect core consumer inflation to hover around zero by April.

BOJ examines inflation expectations surveys as part of its guiding monetary policies. However, BOJ officials stressed their resolve not to loosen policy when rising inflation isn’t accompanied by stable increases in wages.

BOJ will keep its monetary policy loose on Friday, warning of increased economic risk from Ukraine’s crisis. It is not worried about rising inflation or anticipated U.S. rate increases.