Japan consumer confidence edged up in April for first rise in six months

Japan’s consumer confidence index nudged up in April to mark its first increase in six months, following the end of COVID-19 curbs in late March, but inflation expectations hit a record for the third month in a row.

A Cabinet Office survey showed the sentiment index for general households, which includes views on incomes and jobs, was at 33.0 in April, up slightly from 32.8 in March.

“Consumer sentiment turned positive as COVID-19 cases fell further and as the lifting of curbs paved the way for a reopening of the economy,” a government official told a media briefing.

The survey, conducted from April 7 to 20, also found 93.7% of consumers expect prices of goods to rise in the next 12 months — the third straight month of record highs under comparable data dating back to April 2013.

The proportion of consumers who believe prices will increase 5% or more was 55.7%, also the highest on record.

The government kept its assessment of consumer confidence unchanged, as the improvement in April was relatively small, saying it appears weak.

The rising cost of living has fanned fears of a potential slowdown in consumer spending later this year.

The Bank of Japan said Monday that consumers will continue to face more inflationary pressure as electricity bills and food prices rise in the wake of the recent surge in global commodity prices.

Analysts expect the world’s third-largest economy to grow an annualized 5.1% in the current quarter, but for the fiscal year that began last month, they only expect growth of 2.5%, according to a Reuters poll.