Japan’s Consumer Confidence Drops in February

Japan’s consumer confidence worsened in February to its lowest level since September 2011, the government said Wednesday, amid growing concern that a planned consumption tax hike next month may deal a heavy blow to the country’s economic recovery.

The seasonally adjusted index of sentiment among households made up of two or more people fell 2.2 points from the previous month to 38.3, down for the third straight month, the Cabinet Office said. Readings below 50 indicate pessimists outnumber optimists.

The result came as some analysts have warned the 3-percentage-point tax hike to 8 percent may hurt Japan’s economy more significantly than currently projected with the global economic outlook uncertain due in part to a slowdown in emerging economies.

The government said consumer sentiment is “on a weak note,” downgrading its assessment from the expression “leveling off” in January.

In the sentiment survey, consumers are asked about the outlook for the coming six months.

A Cabinet Office official said the index of consumer confidence had also plunged before the consumption tax rate was raised to 5 percent from 3 percent in April 1997.

In February, all of the index’s four components fell.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza