Japan: Consumer confidence recedes further in February to near two-year low
Latest reading: Consumer confidence clocked in at 35.0 in February, down from January’s 35.2. January’s result marked the weakest sentiment since March 2023 and undershot market expectations of 35.7. Consequently, the index moved further below both the 50-threshold and the 10-year average of 38.1, indicating increased pessimism among consumers. Of all the subcomponents of the index, consumers’ willingness to purchase durable goods remained the weakest and fell further in February, likely the result of the fact that inflation has recently soared to the highest levels since the 1990s.
Outlook: The January and February prints gel with our panelists’ expectation for growth in private spending to slow to a one-year low in Q1 as the Bank of Japan’s rate hikes bite and past increases in inflation gnaw at savings pots.