Note: Consumer confidence index was published quarterly before Mar.2004 and monthly data is available after Apr. 2004.
Published monthly by the Cabinet Office. Updated to the month of December, 2016 (published on January 10th, 2017).
Recent data trend
Japan's Consumer Confidence Index (CCI) rose to 43.1 in December 2016 from 40.9 in the last month. All sub-components of the index showed improvement in December, including “employment”, “Income Growth”, “Overall Livelihood” etc. The improvement in employment and income growth is in accordance to the improving wage and job offers to applicant’s ratio in the economy.
The survey also includes the inflation expectation of consumers. The percentage of those expecting prices to go up remained constant at 74.2% in December. However, the percentage remain much lower than the recent peak of 89.2% in April 2015. In our view, the inflation expectation has already deflated in Japan and it will take a significant change in the environment to tilt the expectation upward again.
Brief overview of "Consumer Confidence Index"
Consumer confidence index, published by Cabinet Office as a part of "Consumer confidence survey", aims to measure Japanese households' sentiment toward consumption activities. The index consists of four sub-categories: overall standard of living, income growth, employment and willingness to buy durable goods. By construction, an index level above 50 implies that consumers expect the situation is improving. Japanese consumers seem to have a tendency to think negatively about the future though. The average index level between 1983 and 2013 is 42.8, and the index has rarely risen above 50.
Since 2004, respondents are also asked for their price expectation. Price expectation is measured based on the ratio of households expecting prices to go up, stay the same or go down. Japanese consumers have a tendency to overestimate the likelihood of a rise in price. Between 2005 and 2012, on average 57.2% of households replied that they expect price to rise, 25.9% replied price to remain flat and only 8.5% replied they expect price to fall. In reality, Japanese CPI remained virtually flat throughout the period, in fact declining marginally by 0.7% in total between 2005-2012.