By Leika Kihara
TOKYO (Reuters) - Japanese companies expect consumer prices to rise an average 1.5 percent a year from now, unchanged from projections made three months ago, a sign of the challenge Japan's central bank faces in hitting its target of 2 percent inflation sometime next year.
The detailed Bank of Japan "tankan" survey for June showed on Wednesday that firms expect consumer prices to rise an annual 1.6 percent three years from now, and 1.7 percent five years from now.
That compared with the previous survey in March which showed companies expected consumer prices to rise 1.7 percent both three years and five years from now.
Under its "quantitative and qualitative easing" (QQE) enacted in April last year, the BOJ pledged to accelerate consumer inflation to 2 percent in roughly two years via aggressive asset purchases to end 15 years of mild deflation.
BOJ Governor Haruhiko Kuroda has repeatedly expressed his confidence that Japan is on track to meet the price target, despite the doubts of many private-sector analysts that inflation will accelerate so quickly.
Core consumer inflation stood at 1.4 percent in the year to May, excluding the effect of a sales tax hike in April, half-way through the central bank's price target period.
The BOJ decided to start surveying companies' inflation expectations from the previous tankan survey in March, to give central bankers more information to guide monetary policy.
The data on corporate inflation expectations comes one day after a summary of the tankan showed that business sentiment worsened in the three months to June due to the impact of April's increase in the sales tax to 8 percent from 5 percent.
(Reporting by Leika Kihara; Editing by Chris Gallagher and Eric Meijer)