Japan Consumer Confidence Continues To Edge Higher

Consumer confidence in Japan edged higher in June to 43.6 from 43.0, as Japan's index of industrial output also made a surprise advance. Expected income growth and employment and the willingness to buy durable goods each improved on the month.

The consumer confidence index itself, a diffusion reading, rose to the 79^th percentile of its range of values since 2004. That also corresponds to a ranking in the queue in the 53rd percentile. The reading stand higher in the range than it ranks in the queue. Over the broader sample that goes back to 1982 and is a quarterly survey this month's reading stands in the 46^th percentile of the enlarged queue.

It is clear that Japan's consumer reading is on the mend. It is not certain that the improvement will continue. Compared to the range of values that this index actually has spanned the current reading is well up and out of the danger zone. But when placed in a ordered queue of historic readings the standing is more middling. Just below the 50th percentile in the broad range and a bit above it since 2004.

All this corresponds to what we do know about Japan. It is on the mend but it is mending slowly. The economy is no longer as beleaguered as it was. Consumer continues to gain in confidence as progress is edging ahead. But with the new Prime Minister suffering a mid term election set-back Japan's new agenda for debt reduction may have a higher hurdle to go over. More profoundly Japan could be set for another short stay in office by the new Prime Minister. A set back in the course of action would not be helpful, But it will take another month for us to get the next reading on how consumers feel about this latest breaking news.

Japan Consumer Confidence   Overall Livelihood Income growth Employment Willing to
buy DurGds Value of Assets Jun-10 43.6 41.6 41.4 47.2 -- May-10 43.0 41.1 40.1 46.9 40.2 Apr-10 42.4 40.4 38.3 47.0 40.6 Mar-10 41.2 39.5 35.9 46.8 38.2 3Mo Avg 43.0 41.0 39.9 47.0 39.7 6-Mo Avg 41.8 39.9 37.2 46.4 38.4 12-Mo Avg 40.9 38.8 35.9 46.2 38.4 Since March 2004 High 47.5 46.6 55.2 51.9 50.2 Low 28.5 31.1 14.2 28.3 27.0 Percentile 79.5% 67.7% 66.3% 80.1% 56.9% Rank % 53.9% 42.1% 40.8% 47.4% 36.0% Since June 1982 pooled monthly and quarterly data Rank% 46.6% 32.5% 54.6% 50.9% 34.1% Value of assess analysis uses one-month lag