MNI BRIEF: Japan May Confidence Marks 2nd Straight Drop

Japan's consumer confidence index fell to 36.2 in May from 38.3 in April, its second straight drop and its lowest level since October 2023 as all components worsened over the month, the Cabinet Office on Wednesday revealed.

Consumer confidence is marking time and the downward revision is the first since September 2023, the office added.

The sub-index on asset prices, not included in calculating overall consumer confidence, stood at 45.3 in May, down from 46.9 in April. The share of respondents projecting consumer price gains rose to 93.5 in May from 93.0 in April, the highest level since September 2023 when it stood at 93.7. The share of respondents forecasting lower prices stood at 1.8% in May, down from 2.3% in April.

The share of respondents who expected the consumer price index to rise more than 5% a year ahead rose to 46.9% in May from 44.0% in April, its highest level since October 2023 when it stood at 48.8.

May’s drop has somewhat clouded the Bank of Japan’s view that private consumption is expected to gain momentum amid improving consumer sentiment and wage-hike hopes.

The office conducted the latest survey between May 3-20.