MNI DATA IMPACT: Japan Dec Sentiment Rises; Price Outlook Dn

Household sentiment in Japan rose in December from three months ago for the first rise in 10 quarters although the level remained low, the Bank of Japan's quarterly consumer survey released Tuesday showed.

The BOJ's diffusion index to gauge households' sentiment on current economic conditions rose 5.4 points to -70.2 in December with more people saying sentiment had worsened judging from incomes, media reports and the business performance of employers. Still, it was an improvement from September when the index declined 4.4 points to -75.6.

According to the survey, around 41.0% said income fell from a year earlier, higher than 38.9% in September. About 7.8% said income rose from a year earlier, down from 9.5% in September.

The consumer sentiment outlook index projecting conditions a year ahead rose for a third straight quarter, up 3.5 points to -23.1 in December.

PRICES

The proportion of respondents expecting prices to rise next year stood at 60.0% in December, down from 63.3% in September. Just 7.6% of respondents said prices would fall next year but it was higher than 6.6% three months earlier. The proportion of those expecting little change 12 months ahead rose to 31.2% from 28.7%. The median CPI forecast stood at +2.0%, unchanged from September.

Looking five years ahead, 76.4% said prices would rise, up from 75.6% three months earlier, while 4.6% of respondents expect prices to fall, down from 5.4% in September. Those saying prices would be little changed rose to 17.1% from 16.0%. The median forecast stayed at +2.0%.

The survey was conducted between Nov. 6 and Dec. 2. Of the 4,000 people polled, 2,244, or 56.1%, responded.