Consumer Confidence In Japan Rose For The Second Straight Month

Consumer confidence in Japan rose for the second straight month in February as deteriorations in the labor market eased and unemployment declined to the lowest in 10 months, while wages began to incline. Japanese exports are recovering and it started to give more support for the weakened economy which helped corporate earnings to rise and confidence to increase.

Consumer confidence in Japan rose to 40.0 in February compared to a previous 39.4. Consumer confidence household inclined to 39.8 last month from 39.0, while it came less than analysts' estimates of 40.0.

Overseas shipments advanced in the last period encouraging companies and manufacturers to add more jobs, which pushed household sentiment up for the second straight month in February. Exports gained 5% in the fourth quarter of last year leading stronger recovery in the world's second largest economy, and helping conditions in the labor market to stabilize.

However, rising confidence may encourage consumers to increase spending, keeping in mind that consumer spending accounts for more than half of Japan's gross domestic product. Retail sales shall advance in coming months, benefiting from the rising confidence, besides low prices.

Manufacturing output has been rebounding for ten consecutive months, benefiting from the recovering global demand, especially from China, Japan's main trade partner. Factories began to keep workers for more hours, and add more jobs in order to respond to the recovering demand, and that was reflected to household sentiment.

Unemployment rate declined to 4.9% in January to settle at the lowest level in 10 months, after companies added 540,000 jobs by the beginning of this year. Better conditions in the labor market supported household spending to gain for the sixth straight month in January, giving hope for retailers to realize higher sales and better earnings.

Yet, the Japanese economy grew 0.9% in the three months ended December compared with 0.3% in the fourth quarter. The economy expanded an annual 3.8% after recording 0.0% in the previous three months.

Ecpulse

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