— Japan Dec SA Consumer Confidence Index 38.9 Vs Nov 38.1
— Japan Govt Maintains View: Consumer Confidence Nearly Flat

TOKYO (MNI) – Japan’s consumer confidence posted the first rise in
three months in December as more people believed labor conditions were
improving despite the global economic slowdown and the strong yen, data
released by the Cabinet Office showed on Monday.

The closely watched index stood at 38.9 in December, up from 38.1
in November, when it fell 0.5 point. The index was unchanged in October
and rose 1.6 points in September.

The Cabinet Office maintained its assessment based on the December
index, saying “consumer confidence is nearly flat.”

In December, three out of the four sub-indexes — on overall
economic well-being, labor conditions and the timing of buying durable
goods — improved, while the index for income growth deteriorated for
the third straight month.

The latest survey was conducted on Dec. 15, covering 6,720
households, of which 5,036 responded.

The survey showed the labor conditions sub-index rose 1.8 point to
36.1 in December, the first rise in two months, while the sub-index on
income growth dipped 0.4 point to 38.3.

The indexes measuring asset price gains and leisure time quarterly
— which are not part of the consumer sentiment index — both improved
in December from September for the second straight quarter.

Meanwhile, the latest survey indicated a slight setback in consumer
inflation expectations.

The percentage of people forecasting higher prices in a year’s time
slumped to 61.3% of the total on an unadjusted basis in December, down
from 65.0% in the previous month.

Meanwhile, the percentage of people expecting lower prices 12
months ahead stood at 7.4% last month, down from 8.1% in November.

An annual inflation rate below 2% was forecast by 22.4% of those
surveyed in the latest month, up from 22.2% in November.

Inflation in a range of 2% to 5% was forecast by 25.4% of the total
in the latest month versus 28.5% in the previous month.

Inflation at 5% or over was forecast by 13.5% of the total in the
latest month vs. 14.3% in the previous month.

Price drops of less than 2% were seen by 4.2% of the polled in the
latest month vs. 4.6% in the previous month.

Price drops in a range of 2% to 5% were forecast by 2.1% of those
surveyed in the latest month vs. 2.4% in the previous month.

The annual rate of price drops at 5% or over was foreseen by 1.1%
of the total in the latest month, unchanged from the previous month.

tokyo@marketnews.com
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