Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Japan Consumer Confidence Drops to Lowest Since 2011

Women shop for umbrellas at a store in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg
Women shop for umbrellas at a store in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

April 17 (Bloomberg) -- Japan’s consumer confidence fell to the lowest level since August 2011, and the government cut its economic assessment for the first time in 17 months, as a sales-tax increase on April 1 sapped the public’s spending power.

The March confidence reading of 37.5 fell by 1 from the previous month, the Cabinet Office said in Tokyo today. About 90 percent of respondents to the survey saw prices rising over the next 12 months -- the most in comparable data back to 2004.

Prime Minister Shinzo Abe risks the public souring on his campaign to sustain growth in the world’s third-biggest economy as prices start to rise while wages stay stagnant. Weaker sentiment could make it harder to drive a rebound from a contraction forecast this quarter, and raise the odds that the Bank of Japan adds to its already unprecedented easing.

“Wages aren’t rising much and the sales-tax increase is depressing real incomes, pushing up people’s cost of living,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “The report implies that the slump in the April-June period may be bigger than the government and BOJ are anticipating.”

Sentiment may bottom out in April and start to recover from May, said Maruyama, who sees it likely the central bank will add stimulus in July.

Government Assessment

The confidence reading was 39.9 when Abe took office in December 2012, and rose to 45.7 in May last year -- the highest point during his current term as prime minister. The Topix index of stocks is down more than 10 percent this year after soaring 51 percent in 2013.

Confidence dropped in all five components in the survey, with willingness to buy durable goods falling the most, down by 2 to 30.8

The poll of 5,674 households was conducted on March 15.

The government today cut its view of the economy in April, the first lowering of its assessment since November 2012. The downgrade was due to lower evaluations of private consumption, housing construction, imports and industrial production, a government official said at a briefing.

Shoppers rushed to stores before the tax increase. Nationwide department store sales jumped 25.4 percent in March from the previous year, the biggest gain since at least 1991, according to data compiled by Bloomberg.

Sakura Report

The BOJ today kept its assessment of eight of nine domestic regions unchanged in its Sakura Report for April, the equivalent of the U.S. Federal Reserve’s Beige Book. The economies of all the regions “continued to recover or had been recovering moderately,” while there had been some effects from the subsequent fall-off in demand after the sales-tax hike, according to the report.

The 3 percentage-point increase in the sales levy is set to trigger a 3.4 percent slide in annualized gross domestic product in the April-June period before rebounding the following quarter, according to a Bloomberg News survey. Wages excluding overtime and bonuses fell for a 21st straight month in February, while core consumer prices, which exclude fresh food, rose 1.3 percent from a year earlier.

Consumer prices are rising “moderately,” the government said in its economic report today.

Koichi Hamada, an adviser to Abe on monetary policy, said in an interview last month that the BOJ should add stimulus as soon as May should indicators show the tax rise is seriously damaging the economy.

To contact the reporters on this story: Andy Sharp in Tokyo at; Keiko Ujikane in Tokyo at

To contact the editors responsible for this story: Paul Panckhurst at Andy Sharp, James Mayger

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.