New Zealand Inflation Forecasts Fall as Japan Struggles with PPI Pain

New Zealand's inflation forecasts have fallen significantly as Japan struggles with persistent pain from its Producer Price Index (PPI).

According to recent surveys, New Zealand's Q3 Inflation Expectations are now at just 2.34% for the next two years and 2.6% for the next year, down from previous quarters of 2.53% and 3.4%, respectively.

This downward revision would likely take interest rates in New Zealand toward the middle of the Reserve Bank's 1-3% target range, with the Kiwi dollar falling by 0.6% and two-year yields decreasing by 6 basis points.