— Adds Inflation Expectations At Bottom
— Japan Nov Consumer Confidence Index 40.4 Vs Oct 40.9
— Japan Govt Downgrades View: Consumer Confidence Softer

TOKYO (MNI) – Japan’s Consumer Confidence Survey index fell to 40.4
in November from 40.9 in October, posting the fifth consecutive monthly
drop, on renewed concerns about job security and wage growth, the
Cabinet Office said Friday.

Consumers continued to believe it was not the right time to buy
durable goods, also hampering a recovery in confidence, the survey

The November index was the lowest since February 2010, when the
index rose to 39.8 from 39.0 in January.

The Cabinet Office downgraded its November assessment, saying,
“Consumer confidence is softer.”

Last month, it maintained the recent view that the confidence “is
nearly flat.”

In the November data, all of the four sub-indexes — overall
economic well-being, willingness to buy durable goods, income growth and
employment conditions — worsened from the previous month.

The index showing sentiment on asset values, which is not included
in the overall consumer confidence index, stood at 38.1 in November,
unchanged from October, after improving in October.

Respondents are not asked to provide reasons for saying whether
things are turning better or worse but the household sentiment appears
be dampened by the yen’s rise to 15-year highs against the dollar, which
hurts Japanese exports.

The end to the government’s subsidy program for promoting purchases
of energy efficient vehicles in September has depressed car sales.

The 0.5-point m/m decline in the November index followed the
0.3-point fall in October.

Compared to a year earlier, the overall index was still up 0.9%,
posting the 19 straight y/y rise.

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

The survey also showed that consumer inflation expectations
remained relatively stable with a downward bias in November.

The percentage of people forecasting higher prices in a year’s time
showed the first drop in two months, accounting for 41.8% of the total
and down from 44.2% in October. This compared with the record low of
29.2% marked in December 2009.

Meanwhile, the percentage of people expecting lower prices 12
months ahead was 13.5% in November, up slightly from 13.1% in October
but far below the record high of 31.9% hit in December 2009.

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

The annual inflation rate below 2% was forecast by 22.1% of the
surveyed in the latest month vs. 23.6% in the previous month.

Inflation in a range of 2% to 5% was forecast by 14.2% of the total
in the latest month vs. 15.1% in the previous month.

Inflation at 5% or over was forecast by 5.5% of the total in the
latest month vs. 5.5% in the previous month.

Unchanged prices were projected by 35.8% in the latest month vs
33.6% in the previous month.

Price drops of less than 2% were seen by 7.9% of the polled in the
latest month vs. 8.4% in the previous month.

Price drops in a range of 2% to 5% were forecast by 4.1% of those
surveyed in the latest month vs. 3.4% in the previous month.

The annual rate of price drops at 5% or over was foreseen by 1.5%
of the total in the latest month vs. 1.3% in the previous month.

** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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