Japan Consumer Confidence Fall To Record Low In June 2008

Japanese consumers became more pessimistic than they have been at any tim in at least 26 years in June as higher energy prices and food costs steadily eroded their spending power. The Japanese Consumer Confidence Index dropped to 32.6 from 33.9 in May, according to data from the Japanese Cabinet Office earlier today. This the lowest reading registered since the government began compiling the figures in 1982.

Price rises for fuel and food have evidently badly dented the confidence of Japanese consumers, who after years of deflation had become accustomed to steady or slightly falling prices. Core consumer prices, which exclude those of fresh food but include energy, rose 1.5 percent in May, the biggest increase in 10 years.

Wages on the other hand have only grown lethargically, and were up a mere 0.2 percent in May, the slowest pace so far this year. The price of frequently purchased goods was up 2.4 percent in the same month, leading households to cut back spending at the fastest pace since September 2006.