CSPI falls 0.2%, BOJ's new price projection to be reliability test

Japan's corporate services price index decreased less-than-anticipated, falling 0.2% in March from the previous year, according to data released by the Bank of Japan Wednesday. The reading surpassed economists' expectations of a 0.3% fall. The annual decline follows a zero growth in February and a 0.2% fall in January. On a monthly basis, the index rose as much as 0.7% compared to the 0.3% increase seen during the prior month.

Also, the nation's central bank is set on Friday to estimate that it will achieve the 2% inflation goal in two years, a projection economists believe might be overoptimistic and could call the bank's trustworthiness into question.

"These new BOJ figures will be more a vow of determination rather than credible forecasts," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in Tokyo. 

"It would take a drastic change of corporate behavior for inflation to hit 2 percent in Japan. Companies would really have to believe that prices and sales will start to rise, enough to make them lift wages and spending. That will probably take much longer than two years," he said.