Japan Consumer Confidence January 2008

Since Claus has just written a substantial analysis, this is just a brief note to keep the data up to date. The news, hardly unexpectedly, isn't good, since Japan's consumer confidence dropped in January to its lowest level in more than four years as rising prices and falling wages continued to squeeze households. The Consumer Confidence Index fell to 37.5 last month from 38 in December, according to the Cabinet Office in Tokyo today. Confidence among consumers hasn't been this low since June 2003.



Inflation expectations have certainly arrived although, if we look at what Claus has to say about core-core prices, they may yet turn out to be disappointed as the year advances, and a record 84.9 percent of those questioned said they thought prices would be higher in a year.

The Cabinet Office left its assessment of sentiment unchanged for a second month, describing it as ``deteriorating.''

In terms of the sub-indexes, both the employment component and the willingness to buy one continued to deteriorate, with employment falling to 38.6 from 40.6 in December and willingness to buy falling to 36.7 from 37. As can be seen in the chart below these have both been on a downward trend for some months now.