Japan Aug Consumer Confidence Slips on Bad Weather; Trend Flat

--Japan Aug Consumer Confidence Index 43.3 Vs July 43.8

--Japan Aug Consumer Confidence Posts 1st M/M Drop in 2 Months

--Japan Govt Downgrades View: Consumer Confidence Largely Flat

     TOKYO (MNI) - The Cabinet Office on Friday released the results of its

latest monthly Consumer Confidence Survey of households with two or more people,

which was conducted on Aug. 15.

     * Japan's consumer confidence index slipped 0.5 point to 43.3 in August on

a seasonally adjusted basis, posting the first month-on-month drop in two months

after rising 0.5 point to 43.8 in July, hit by bad weather and heightened

tensions between North Korea and the U.S.

     * The government downgraded its assessment for the first time in nine

months, saying confidence was "largely flat," instead of the previous state of

"picking up" seen for the five months through July. The confidence level is

still considered fairly high but the index's three-month moving average for the

June-August period fell after rising in the May-July period. The index has shown

ups and downs in the past several months.

     * Consumers were more pessimistic about all of the four key aspects that

affect their sentiment -- overall economic well-being, income gains, job

prospects and whether it would be a good time to buy durable goods over the next

six months.

     * "The long stretch of rainy days and the lack of sunshine dampened the

confidence in the Tohoku and Hokuriku regions (in northern and central Japan),

pushing down the overall confidence level." said Toshimi Nishizaki, director of

the Department of Business Statistics at the Cabinet Office. "People in those

regions saw their farming communities suffer and tourism was also hurt."

     * "Escalating geopolitical risks caused the yen to appreciate and stock

prices to fall, another factor behind the fall in consumer confidence,"

Nishizaki said.

     * The index on asset prices, which is not one of the four sub-indexes used

to calculate overall consumer confidence, showed its first month-on-month fall

in two months, down 1.1 points in August after rising 1.8 points the previous

month.

     * The survey also showed that the public's inflation expectations for 12

months ahead picked up in August. The share of those projecting price rises

increased to 76.1% from 75.8% in July. It was the first rise in two months. The

share of respondents forecasting lower prices decreased to 3.5% from 4.2%, the

first drop in two months. The prices of household goods have been rising in

recent months.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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