Japan: Consumer sentiment stays downbeat in June despite improving
Latest reading: Consumer sentiment rose to 34.5 in June from May’s 32.8, marking the second consecutive increase. However, the rise was not enough to reverse the downtrend in place since April last year, with the index remaining entrenched below the 50-threshold, indicating sustained pessimism among consumers.
As was the case in May, in June all subcomponents of the consumer sentiment survey improved compared to the past month. Consumers’ willingness to buy durable goods remained the weakest subcomponent, likely reflecting the impact of recently high inflation on disposable income.
Outlook: Despite June’s uptick, consumer sentiment in Q2 averaged at the lowest level since Q1 2023. This bodes poorly for private spending, which our panelists expect to expand at a weak pace for the third quarter running in Q2.