Japan Consumer Confidence Index

Japan's consumer confidence index was 43.2 in April 2017, a decline of 0.7 points from the previous month.

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 April 2017 (published on May 8th, 2017).

Recent data trend

In April 2017, seasonally adjusted consumer confidence index fell by 0.7 points to 43.2, after reaching a 3 year high of 43.9 in March. Among its sub-components, income growth, willingness to purchase durable goods, overall livelihood fell in April, contributing to the decline in the overall index. On the other hand, the employment index rose to 47.7 in April, the highest level since July 2014. The improvement in the employment sub-index is in line with other labor market indicators such as job offers to applicant ratio.
Together with the consumer confidence index and its components, the cabinet office releases a survey on price expectation among households. The results shows a sudden jump in the inflation expectations of Japanese households. In April, 78.9% of households said that they expect price to rise, an increase of 7.4% points from the previous month. This is a notable results as we were seeing a decline in the inflationary expectation in the past 2 years.

In our view, the survey results show that the consumer sentiment remains relatively positive, and we will be intrigued to see if the the rise in inflationary expectation would persist in the coming months. 

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. 

The Next Release Date: June 2nd, 2017.

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