Japan: Consumer sentiment improves in May
Latest reading: Consumer sentiment rose to 32.8 in May from April’s 31.2, marking the first increase after five months of decline. However, the index remained at one of the weakest levels in the past year and entrenched below the 50-threshold, indicating sustained pessimism among consumers.
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 May’s uptick, consumer sentiment in Q2 so far has 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.