26 July 2000

Consumer confidence is on the up and up, according to the Japan’s Economic Planning Agency, whose quarterly index of consumer confidence was published yesterday.

The index, covering the year’s second quarter, rose to 43.1, up 0.9% on Q1, and a gain of 1.3% on Q4 of 1999. The strongest growth in confidence was in employment expectations, which increased by 3.7%. This contrasts with the outlook for incomes, which suggests that Japanese households do not expect much largesse from this year’s company summer bonuses.

Regarded as the foremost indicator of consumer sentiment in Japan, the EPA index commands the rapt attention both of Japanese politicians and the nation’s markets. Since the early 1990s, the index has recorded a volatile pattern of consumer confidence with little of cheer until late 1999 when a clear recovery trend became apparent.

Comments James Malcolm, an economist at J P Morgan, Tokyo: “The survey shows a continued improvement of consumer confidence, and bolsters expectations for an increase in consumer spending in the second half of the year.”

News source: Financial Times