Japan Consumer Confidence at Four-Year High

Japanese consumer confidence improved in November to its highest level in four years, lifted by surging stock prices and a robust job market, the cabinet office said on Monday.

The sentiment index for general households, which includes views on incomes and jobs, rose 0.4 point from the previous month to 44.9, up for a third straight month and marking the highest since September 2013, Reuters reported.

The survey adds to upbeat signals surrounding consumer sentiment—service-sector business confidence reached a 3-1/2-year high last month.

Japan’s economy is enjoying its longest expansion in 16 years but private consumption slipped for the first time in seven quarters in July-September, highlighting the need for a tight job market to translate into higher salaries.

“Consumer spending has been picking up since last year but the pace of recovery lacks momentum compared with that of exports and firms’ production activity,” said Hidenobu Tokuda, a senior economist at Mizuho Research Institute. “It needs wage increases to help to boost consumer spending,” he said.

In October, Japan’s unemployment rate held steady at a 23-year low of 2.8% and the availability of jobs reached the highest in almost 44 years. But wages slipped after adjustment for inflation for the fourth straight month in September. The October data is due out on Friday.

Meanwhile, The Bank of Japan does not plan to change its massive stimulus program and will “immediately act” if risks to the economy undermine the momentum toward achieving its inflation target, central bank governor Haruhiko Kuroda said on Monday.

While offering a sanguine view of the global economy, Kuroda warned of factors that could threaten the recovery including geopolitical risks and the rising tide of protectionism. “Particularly, what I’m concerned about are protectionist tendencies in some countries and geopolitical risks surrounding the world economy,” Kuroda told a Europlace financial forum.

“I sincerely hope that the multilateral trading system would be maintained in coming years,” he said.

US President Donald Trump’s “America First” approach has raised concerns among some policymakers in Asia, where many export-reliant economies including Japan benefit from free trade and advocate multilateral trade agreements.

Asked if he has become more worried about the demerits of ultra-loose policy, Kuroda said the BoJ had not changed its message since revamping its policy framework last September.

The BoJ changed its strategy by revamping its framework last September, when it noted the yield curve had became “too flat” and wasn’t good for the banking system, Kuroda said.