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Economy in Brief

Japanese Consumer Confidence Continued to Strengthen In June
by Louise Curley July 13, 2009

The diffusion index of Consumer Confidence among Japanese families of 2 or more persons was 37.6 in June,  5% above the May figure and 16% above the figure of June 2008.  Although the index indicates a low level of confidence, the index has been rising for the past six months and is now 43% above the historically low level reached last December, as can be seen in the first chart.

The second chart shows the major factors that influence confidence.  The outlook for employment took a big jump in June, rising more than 16%. The improvement in the employment outlook and related improvements in income growth and general livelihood, were, no doubt, important reasons for the big increased in the willingness to buy durable goods, which increased more than 10% in June and was almost 48% above June 2008.

The improvement in consumer confidence together with the improvement in business confidence in the past week or so--rising leading and coincident indicators and the recent Tankan results--suggest at the very least that the Japanese economy is no longer declining.

Japan: Consumer Confidence: 2 + Person Family (S.A. Diffusion Indexes)  June 09 May 09 June 08 M/M %  Y/Y % 2008 2007 2006
Consumer Confidence 37.6 34.5 32.5 8.88 15.69 32.7 44.1 46.9
  Overall Livelihood 37.6 35.3 30.4 6.62 23.68 31.5 41.6 44.4
  Income Growth 35.7 34.4 36.4 3.78 -1.92 36.3 42.0 43.0
  Employment 31.2 26.8 32.2 16.42 -3.11 30.7 47.5 51.2
  Willingness to Buy Durable Goods 46.1 41.8 31.2 10.38 47.76 32.3 45.4 49.0
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