Japan's Economy Watchers, Consumer Confidence (May)

Research evidence excerpt

Japan's Economy Watchers, Consumer Confidence (May)

erage-related sectors, several respondents noted that spending

per customer is rising and that there are a growing number of tourists. In the

services sector, respondents were upbeat on favorable calendar effects from

the long Golden Week holiday this year. In housing-related industries, there

was a slight drop in respondents expressing concerns about surging prices

and materials due to tensions in the Middle East.

Within corporate activity, the DI rose for both manufacturing and non-

manufacturing. In the manufacturing sector, respondents noted that

semiconductor and automotive-related orders were strong. Within non-

manufacturing sectors, several respondents from the construction industry

reported strong orders. In employment-related sectors, demand for temporary

staffing appears to have increased, helped by more favorable calendar effects

from the Golden Week holiday.

Looking at the future conditions DI, there were increases for household

activity (from 39.8 to 40.9) and corporate activity (from 37.9 to 40.4), but a

decline for employment (from 40.1 to 39.2; see Figure 2). Within household

activity, the future DI increased for retail (from 40.8 to 40.9), food & beverages

(from 38.9 to 42.4), and services (from 39.6 to 42.6), but was flat for housing

(31.4). Within corporate activity, the future DI rose for both manufacturing (from

37.5 to 41.0) and non-manufacturing (from 38.2 to 39.8).

In services within household activity, there were more comments expecting

an early end to the conflict in the Middle East than in April. In food &

beverages, there was a slight MoM decline in concerns about the Middle

East conflict. In retail-related sectors, respondents expect continued air

conditioner sales going forward.