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Japan's Feb. consumer confidence down to lowest level in over 2 yrs

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(Globalpost/GlobalPost)

Japan's consumer confidence worsened in February to its lowest level since September 2011, the government said Wednesday, amid growing concern that a planned consumption tax hike next month may deal a heavy blow to the country's economic recovery.

The seasonally adjusted index of sentiment among households made up of two or more people fell 2.2 points from the previous month to 38.3, down for the third straight month, the Cabinet Office said. Readings below 50 indicate pessimists outnumber optimists.

The result came as some analysts have warned the 3-percentage-point tax hike to 8 percent may hurt Japan's economy more significantly than currently projected with the global economic outlook uncertain due in part to a slowdown in emerging economies.

The government said consumer sentiment is "on a weak note," downgrading its assessment from the expression "leveling off" in January.

In the sentiment survey, consumers are asked about the outlook for the coming six months.

A Cabinet Office official said the index of consumer confidence had also plunged before the consumption tax rate was raised to 5 percent from 3 percent in April 1997.

In February, all of the index's four components fell.

Consumers' view of near-term readiness to buy new durable goods declined 4.0 points to 32.4 and that of employment conditions dropped 2.4 points to 46.9. Their assessment of livelihoods decreased 1.9 points to 35.6 and that of income growth slid 0.4 point to 38.2.

The survey, meanwhile, showed that 89.3 percent of households expect consumer prices to rise in the year ahead, down 0.1 point from January.

The survey conducted on Feb. 15 covered 8,400 households, with valid responses received from 5,635 of them.

==Kyodo

http://www.globalpost.com/dispatch/news/kyodo-news-international/140312/japans-feb-consumer-confidence-down-lowest-level-over-