Japanese consumer confidence slips in June for first time in six months amid slowing income growth, rising prices; mood worsens for all four components of government survey

Cindy Allen

Cindy Allen

TOKYO , July 10, 2013 () – Japanese consumer confidence slipped in June for the first time in six months as consumers reported slowing income growth and rising prices, exposing the challenges to Prime Minister Shinzo Abe's plan to revive the economy by generating inflation.

Household sentiment fell 1.4 points from May to 44.3 in June, with the mood worsening for all four components -- livelihood, income, jobs and spending appetite for durable goods, the government survey showed.

The survey showed 83.9 percent of respondents expect prices to rise a year from now, up 0.8 point from the previous month to the highest ratio in nearly five years.

Abe has pursued a policy of aggressive stimulus, dubbed Abenomics, to revive the economy and end 15 years of deflation. The early signs have been encouraging, but the plan in part relies on growth boosting wages -- something yet to be seen.

Indeed, the survey's index of income growth fell 0.6 point to 41.6 in June, the first fall in six months.

The Bank of Japan is hoping its strong commitment to boost prices through massive stimulus would change the widely-held perception that deflation will persist and so encourage consumers to spend now rather than later.

The survey found consumers expecting prices to rise as higher raw material costs and a weaker yen push up electricity bills and prices of groceries, but the perceptions of weak wages could see them tighten spending.

Japan's corporate goods price index, which tracks wholesale price moves, rose 1.2 percent in June from a year earlier, the biggest increase since November 2011, the BOJ said on Wednesday.

The government's sentiment survey, which began in 1982, targets households with two more people. A reading below 50 in the sentiment index shows pessimists outnumber optimists.

(Writing by Leika Kihara; Editing by John Mair)

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

Share:

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.