TOKYO: The official Japanese government-sponsored consumer confidence index has declined for the third month in a row, with sentiment still suffering from the recent earthquake and nuclear scare.
April saw a 5.5 point month on month decrease on the index, with confidence levels standing at just 33.1. A score of 50 is the neutral level, below which pessimism outweighs optimism.
Consumers reported falls in confidence in all components of the index. Income growth anticipation declined from 39.8 to 37 and the seasonally adjusted indicator for overall livelihood decreased to 34.8 from 38.7.
Willingness to buy durable goods has also fallen from 38.8 in March to 32.9 in April.
Minutes from a meeting of the Bank of Japan's monetary policy committee on April 6th and 7th reiterate that "Japan's economy is under strong downward pressure, mainly on the production side, due to the effects of the earthquake disaster".
Standard & Poor's, a credit ratings agency, expects Japan's net government debt to reach 145% of GDP by 2013, higher than previous predictions.
This changed forecast is due to the expected significant costs of post-earthquake reconstruction.
The Japanese advertising sector is also predicted to be subdued.
According to latest Warc forecasts, Japan's overall adspend growth will slow from 6.6% in 2010 to 1.2% in 2011.
This compares unfavourably with Asian rivals such as China, where adspend is forecast to rise by 12.5% in 2011, and developed-world rivals like Germany, where growth of 3.3% is predicted.
The question of Japan's recovery from the earthquake was discussed by delegates at the recent Asia Marketing Effectiveness Festival.
McCann Worldgroup research discussed at the event showed that, according to a survey conducted two weeks after the disaster, 80% of the Japanese population were confident that the country was capable of rebuilding.
When asked the same question six weeks after the disaster, 74% were confident of recovery.
Data sourced from RTT News/The Japan Times/Dawn.com; additional content by Warc staff