— Japan June Consumer Confidence Index 43.5 Vs May 42.8
— Japan Govt Upgrades View: Consumer Conf Seen improving
— Japan Consumer Confidence Posts 14th Y/Y Rise In Row
— Japan June Consumer Confidence Index Highest Since Sep 2007

TOKYO (MNI) – Japan’s Consumer Confidence Survey index posted its
sixth consecutive monthly gain, rising to 43.5 in June — a three year
high — from 42.8 in May as fears of job and wage cuts continued to
ease, the Cabinet Office said on Tuesday.

All the sub-indexes improved in June and the headline index hit the
highest level since September 2007, when it was at 44.1.

The Cabinet Office upgraded its assessment from the previous month,
saying: “Consumer confidence appears to be improving.” Until last month
it said that confidence “continues picking up.”

The index has been recovering since January after having dropped
for the second straight month in December. The decline in November 2009
was the first in 11 months.

The recovery of consumer confidence to the pre-financial crisis
level is likely to ease some concern among Bank of Japan officials about
the drag on the economy from the recent slump in stock markets.

In contrast to today’s data, the Economy Watchers’ Survey index for
current conditions, which is also released by the Cabinet Office, dipped
to 47.5 in June from 47.7 in May, dropping for the second straight
month. But the level of the index remained at a three-year high.

In today’s data, all four sub-indexes for consumer confidence —
overall economic well-being, income growth, employment, and willingness
to buy durable goods — posted month-on-month gains.

From a year earlier, the overall index rose 5.9 points in June,
marking the 14th consecutive year-on-year rise, after rising 7.1 points
in May.

The index showing sentiment on asset values, which is not included
in the overall consumer confidence index, fell by 0.8 point to 39.4 in
June, reflecting the recent weakness of the Tokyo stock market. It
posted the second month-on-month drop.

Among consumer confidence index components, the sub-index for
sentiment on overall economic well-being rose to 43.6 in June from 43.0
in May, up for the sixth month in a row. It was the highest level since
May 2007, when the index was at 45.0.

The index rose 6.2 points from a year before, posting the 15th
consecutive y/y gain, after rising 6.7 points in May.

The income growth sub-index rose to 41.6 in June from 41.1 in May,
posting the sixth consecutive m/m gain. It was the highest level since
the 42.2 marked in October 2007.

It rose 5.8 points from a year earlier, up for the 12th straight
month.

The employment conditions sub-index rose to 41.4 in June from 40.1
in May, also the sixth consecutive m/m rise. The index continued to rise
sharply from a year earlier, up 9.7 points, for the 12th consecutive y/y
gain.

The sub-index for willingness to buy durable goods rose to 47.2 in
June from 46.9 the previous month, up for the first time in two months.
The June level was the highest since July 2009, when it was at 47.3.
From a year earlier, the index rose 1.7 points.

The overall index recovered steadily from the record low of 26.2
hit in December 2008 through September 2009. It remained unchanged at
40.5 in October 2009, a two-year high, but there were already signs that
confidence had started to erode, falling in each of the next two months.

The index reached its most recent peak of 48.4 in February 2007,
but had trended downward till December 2008.

The latest survey was conducted on June 15, covering 6,720
households, of which 5,037 responded.

The consumer confidence index is based on replies to a survey
asking about four aspects of consumer sentiment: the perception of
overall livelihood, income growth, employment conditions and the
willingness to purchase durable goods.

Respondents are asked if they see improvement, deterioration, or no
change in these areas over the coming six months.

The survey also showed that the downward bias in consumer inflation
expectations continued to ease in June as the ratio of people expecting
lower prices in a year’s time fell for the sixth consecutive month,
falling to 11.8% of the total from 13.1% in the previous month.

However, the ratio of people foreseeing higher prices showed its
first drop in six months, dipping to 43.5% from 46.0%.

The ratio of people who projected unchanged prices rose to 34.9% in
June from 32.2% in May, marking the first rise in three months.

The number of people foreseeing higher prices ahead rose for the
first time in 11 months in June 2009 and then dipped in July before
rising briefly in August. It fell for four straight months through
December 2009.

Of those surveyed in June, 11.8% said they expected prices to drop
in a year from now, compared with the record high of 31.9% hit in
December 2009. Of them, 7.5% projected a price drop of less than 2%,
down from 8.8% in May.

The record low for those expecting price drops was 2.4% marked in
July 2008, when crude oil prices hit all-time highs.

Of all the respondents, 43.5% said they expected prices to rise in
a year’s time, compared with the record low of 29.2% marked in December
2009.

Those projecting inflation at or above 5% stood at 4.9% in June, up
slightly from 4.8% in the previous month, while those expecting
inflation lower than 2% accounted for 24.8%, down from 25.8%.

The survey showed that 13.8% of those polled forecast an annual
inflation rate between 2% and 5% in a year’s time, down from 15.4% in
the previous month.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$A$$$,M$J$$$,MAJDS$,MT$$$$]