TOKYO: Japanese consumer confidence slightly worsened in December, suggesting consumers remain cautious despite some data showing signs of the economy bottoming out.
The survey also showed 59.6 percent of the respondents think prices will rise over 12 months, steady from the previous month, with new Prime Minister Shinzo Abe’s aggressive stance on fiscal and monetary policy yet to have an material impact on consumers’ price expectations.
The survey’s sentiment index for general households, which includes views on incomes and jobs, inched down to 39.2 last month from 39.4 in November, data from the Cabinet Office showed on Wednesday. A reading below 50 suggests consumer pessimism.
“Winter bonuses and overtime work also fell last month, so it will take more time for consumer confidence to recover,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“I think Prime Minister Abe’s aggressive stance on monetary policy and fiscal spending is affecting business sentiment. But we need see how these measures will actually affect the real economy.”
He said consumer sentiment would likely lag a pick-up in the economy by about six months.
Abe, whose party surged to power in a lower house election in December, pressed the Bank of Japan to set higher inflation target and adopt bolder monetary policy to beat deflation. Most of the people surveyed responded before the election.
The government approved on Tuesday a 13.1 trillion yen ($147.8 billion) extra budget, which includes 10.3 trillion yen in economic stimulus spending to spur growth and end nagging deflation.