Japanese household sentiment fell to a six-month low last month, indicating the need for measures to stimulate consumer spending and sustain a recovery from the country’s worst postwar recession.
The confidence index dropped to 37.6 last month from 39.5 in November, the Cabinet Office said yesterday in Tokyo. The government lowered its assessment of the report, describing sentiment as “weak.”
Japanese Finance Minister Naoto Kan yesterday urged lawmakers to pass a proposed ¥7.4 trillion (US$82 billion) extra budget for the current fiscal year, saying it would contribute 0.3 percentage point to economic growth.
Stimulus efforts implemented by the previous administration have begun to fade, signaling it is “far too early” to see a sustained recovery in consumer spending, economist Azusa Kato said.
“The stimulus was the only reason sentiment rallied as much as it did even when incomes were still plunging,” Kato, an economist at BNP Paribas in Tokyo, said before the report. “Sentiment is falling again because those boosts are waning, exposing the underlying weakness of domestic demand.”
Confidence among Japanese has been battered by 18 months of declining wages and unemployment near a postwar high.
A dearth of spending has caused consumer prices to decline for nine months as retailers discount products to attract customers.
The consumer confidence report, which also tracks households’ price expectations, showed that a growing number of consumers see deflation becoming more entrenched.
The portion of people expecting prices to fall exceeded those who see goods becoming more expensive for the first time since the survey began in April 2004. Thirty-two percent of consumers said prices would be lower a year from now, compared with 29 percent of those who see costs increasing.
Kan said yesterday that the economy was at risk of sliding back into a recession, stressing the need for parliament to pass the extra stimulus steps unveiled by Japanese Prime Minister Yukio Hatoyama last month.
“The economy is picking up, but it lacks strength for a self-sustained recovery,” Kan said.
The stimulus plan includes extending incentives introduced by the previous government to purchase environment-friendly products.
Not all analysts agree households will cut back amid signs of improvement in the job market.
The job-to-applicant ratio rose in November for a third month to 0.45, meaning there are 45 positions for every 100 candidates.
Manufacturers increased workers’ overtime hours for an eighth month as a jump in factory orders lifted labor demand.
Julian Jessop, chief international economist at Capital Economics Ltd in London, projects consumer spending will gain 1.8 percent this year.
“The purpose of the fiscal stimulus was to kick-start the economy and to stabilize the labor market. In that sense, it succeeded,” Jessop said. “We’re forecasting that consumer spending recovers its losses from the last two years.”
Taiwan is projected to lose a working-age population of about 6.67 million people in two waves of retirement in the coming years, as the nation confronts accelerating demographic decline and a shortage of younger workers to take their place, the Ministry of the Interior said. Taiwan experienced its largest baby boom between 1958 and 1966, when the population grew by 3.78 million, followed by a second surge of 2.89 million between 1976 and 1982, ministry data showed. In 2023, the first of those baby boom generations — those born in the late 1950s and early 1960s — began to enter retirement, triggering
One of two tropical depressions that formed off Taiwan yesterday morning could turn into a moderate typhoon by the weekend, the Central Weather Administration (CWA) said yesterday. Tropical Depression No. 21 formed at 8am about 1,850km off the southeast coast, CWA forecaster Lee Meng-hsuan (李孟軒) said. The weather system is expected to move northwest as it builds momentum, possibly intensifying this weekend into a typhoon, which would be called Mitag, Lee said. The radius of the storm is expected to reach almost 200km, she said. It is forecast to approach the southeast of Taiwan on Monday next week and pass through the Bashi Channel
NO CHANGE: The TRA makes clear that the US does not consider the status of Taiwan to have been determined by WWII-era documents, a former AIT deputy director said The American Institute in Taiwan’s (AIT) comments that World War-II era documents do not determine Taiwan’s political status accurately conveyed the US’ stance, the US Department of State said. An AIT spokesperson on Saturday said that a Chinese official mischaracterized World War II-era documents as stating that Taiwan was ceded to the China. The remarks from the US’ de facto embassy in Taiwan drew criticism from the Ma Ying-jeou Foundation, whose director said the comments put Taiwan in danger. The Chinese-language United Daily News yesterday reported that a US State Department spokesperson confirmed the AIT’s position. They added that the US would continue to
The number of Chinese spouses applying for dependent residency as well as long-term residency in Taiwan has decreased, the Mainland Affairs Council said yesterday, adding that the reduction of Chinese spouses staying or living in Taiwan is only one facet reflecting the general decrease in the number of people willing to get married in Taiwan. The number of Chinese spouses applying for dependent residency last year was 7,123, down by 2,931, or 29.15 percent, from the previous year. The same census showed that the number of Chinese spouses applying for long-term residency and receiving approval last year stood at 2,973, down 1,520,
RSS