diff --git a/hledger-lib/Hledger/Data/Types.hs b/hledger-lib/Hledger/Data/Types.hs
index 8d41ec9cd..1521ac8da 100644
--- a/hledger-lib/Hledger/Data/Types.hs
+++ b/hledger-lib/Hledger/Data/Types.hs
@@ -43,6 +43,9 @@ import Text.Printf
 import Hledger.Utils.Regex
 
 
+-- | A possibly incomplete date, whose missing parts will be filled from a reference date.
+-- A numeric year, month, and day of month, or the empty string for any of these.
+-- See the smartdate parser.
 type SmartDate = (String,String,String)
 
 data WhichDate = PrimaryDate | SecondaryDate deriving (Eq,Show)
diff --git a/hledger-lib/Hledger/Read/JournalReader.hs b/hledger-lib/Hledger/Read/JournalReader.hs
index 4d87779fa..37b034869 100644
--- a/hledger-lib/Hledger/Read/JournalReader.hs
+++ b/hledger-lib/Hledger/Read/JournalReader.hs
@@ -465,6 +465,14 @@ transactionmodifierp = do
   return $ TransactionModifier querytxt postings
 
 -- | Parse a periodic transaction
+--
+-- This reuses periodexprp which parses period expressions on the command line.
+-- This is awkward because periodexprp supports relative and partial dates, 
+-- which we don't really need here, and it doesn't support the notion of a
+-- default year set by a Y directive, which we do need to consider here.
+-- We resolve it as follows: in periodic transactions' period expressions,
+-- if there is a default year Y in effect, partial/relative dates are calculated
+-- relative to Y/1/1. If not, they are calculated related to today as usual.
 periodictransactionp :: MonadIO m => JournalParser m PeriodicTransaction
 periodictransactionp = do
 
@@ -473,8 +481,16 @@ periodictransactionp = do
   lift $ skipMany spacenonewline
   -- a period expression
   off <- getOffset
-  d <- liftIO getCurrentDay
-  (periodtxt, (interval, span)) <- lift $ first T.strip <$> match (periodexprp d)
+  pos <- getPosition
+  
+  -- if there's a default year in effect, use Y/1/1 as base for partial/relative dates
+  today <- liftIO getCurrentDay
+  mdefaultyear <- getYear
+  let refdate = case mdefaultyear of
+                  Nothing -> today 
+                  Just y  -> fromGregorian y 1 1
+  (periodtxt, (interval, span)) <- lift $ first T.strip <$> match (periodexprp refdate)
+
   -- In periodic transactions, the period expression has an additional constraint:
   case checkPeriodicTransactionStartDate interval span periodtxt of
     Just e -> customFailure $ parseErrorAt off e
@@ -493,8 +509,8 @@ periodictransactionp = do
       return (s,c,desc,(cmt,ts))
     )
 
-  -- next lines
-  postings <- postingsp (Just $ first3 $ toGregorian d)
+  -- next lines; use same year determined above
+  postings <- postingsp (Just $ first3 $ toGregorian refdate)
 
   return $ nullperiodictransaction{
      ptperiodexpr=periodtxt
diff --git a/hledger-lib/hledger_journal.m4.md b/hledger-lib/hledger_journal.m4.md
index 413a48ad5..56531a2d3 100644
--- a/hledger-lib/hledger_journal.m4.md
+++ b/hledger-lib/hledger_journal.m4.md
@@ -1019,6 +1019,10 @@ There is an additional constraint on the period expression:
 the start date must fall on a natural boundary of the interval.
 Eg `monthly from 2018/1/1` is valid, but `monthly from 2018/1/15` is not.
 
+Partial or relative dates (M/D, D, tomorrow, last week) in the period expression
+can work (useful or not). They will be relative to today's date, unless 
+a Y default year directive is in effect, in which case they will be relative to Y/1/1.
+
 If you write a transaction description or same-line comment, 
 it must be separated from the period expression by **two or more spaces**. Eg:
 
diff --git a/tests/budget/forecast.test b/tests/budget/forecast.test
index f97e3af64..8fa78d5dc 100644
--- a/tests/budget/forecast.test
+++ b/tests/budget/forecast.test
@@ -105,21 +105,54 @@ hledger register -b 2015-12 -e 2017-02 -f - assets:cash --forecast
 >>>2
 >>>=0
 
-# TODO
-# 5. Y should affect the partial date in this periodic transaction.
-# Also the recur tag's value ?
-#hledger -f - print --forecast desc:forecast
-#<<<
-#Y 2000
-#
-#~ 2/1 forecast
-#
-#; a real transaction to set --forecast's start date
-#2000/1/1 real
-#
-#>>>
-#2000/02/01 forecast
-#    ; recur: 2000/2/1
-#
-#>>>2
-#>>>=0
+# 5. Y affects M/D partial dates in periodic transactions.
+# The recur tag shows the original period expression and is not modified.
+hledger -f - print --forecast desc:forecast
+<<<
+Y 2000
+
+~ 2/1 forecast
+
+; a real transaction to set the start of the forecast window
+2000/1/1 real
+
+>>>
+2000/02/01 forecast
+    ; recur: 2/1
+
+>>>2
+>>>=0
+
+# 6. Y also sets the month to 1, affecting D dates:
+hledger -f - print --forecast desc:forecast
+<<<
+Y 2000
+
+~ 15 forecast
+
+; a real transaction to set the start of the forecast window
+2000/1/1 real
+
+>>>
+2000/01/15 forecast
+    ; recur: 15
+
+>>>2
+>>>=0
+
+# 7. Y also sets the day to 1, affecting relative dates:
+hledger -f - print --forecast desc:forecast
+<<<
+Y 2000
+
+~ next month forecast
+
+; a real transaction to set the start of the forecast window
+2000/1/1 real
+
+>>>
+2000/02/01 forecast
+    ; recur: next month
+
+>>>2
+>>>=0