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Economy in Brief

Japanese Consumer Confidence
by Louise Curley  October 11, 2011

Japan's Economic and Social Research Institute Consumer Confidence Survey shows a slight improvement in consumer confidence in September. The index, a diffusion index, was 38.5% a rise of 1.0 percentage point from July and the highest level since March of this year. It was March 11 when Japan was struck by a massive earthquake and tsunami. The full impact of the disaster was felt in the April, when the index dropped to 33.6%, and in subsequent months. Even before the disasters of March, however, Japanese consumers had not been very confident for some time, as can be seen in the first chart. The measure of consumer confidence has been in existence only since April, 2004, during a period of sluggish growth in the Japanese economy. No doubt, had measures of consumer confidence been available in the high growth decades of the fifties and sixties of the last century, we would be able to see some contrast between the moods of those consumers and the ones of the last decade or so.

Contrary to the rise in confidence shown by the Economic and Social Research Institute, the Economy Watchers Surveys showed small declines in confidence in both current and future conditions. While the index for confidence in current conditions fell 2 percentage points from 47.3% to 45.3% in September, confidence in future conditions fell only 0.7 of a point. As a result, consumers once again expect the future to be better than the present. As can be seen in the second chart, consumers have generally rated future conditions higher than those of the present. The Economy Watchers Surveys have a bit more history than the Consumer Confidence Index, but it is still a period of sluggish growth.

Japan Consumer Confidence Sep 11 Aug 11 Jul 11 Jun 11 May 11 Apr 11 Mar 11 Feb 11 Jan 11
Economy Watchers' Survey (Diffusion Index)
Current Conditions 45.3 47.3 52.6 49.6 36.0 28.3 27.7 48.4 44.3
Future Conditions 46.4 47.1 48.5 49.0 44.9 38.4 26.6 47.2 47.2
Consumer Confidence (Diffusion Index) 38.5 37.5 37.7 36.3 35.1 33.6 38.3 40.7 41.1
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