Japanese Household Consumer Confidence (OCT) (05:00 GMT; 0:00 EST)
Consensus: --
Previous: 45.5

Outlook: In recent months, the Japanese economy has enjoyed expansion at the hands of consumer and capital expenditures, marking the first time the country has seen economic growth resulting from private spending rather than exports and government expenditures since 1991. Such growth has been fueled by labor market growth and increased wages. Consumer confidence, however, could remain little changed for October in spite of the general upward trend in employment figures. In early October, the average price of retail gasoline was at near-record levels, placing a heavy burden on consumer's perception of overall economic livelihood and will leave consumers less inclined to purchase expensive durable goods, which is likely to pull down the confidence index in spite of any optimism regarding future employment and income growth. Essentially, although the sub-indexes of income and employment growth may be optimistic, a generally negative outlook in the contributory indexes measuring overall livelihood and willingness to buy durable goods will counterbalance this optimism and possibly cause stagnation in the headline number.

Previous: Consumer confidence in Japanese households, including those households consisting of a single person, fell to 45.5 in September from 48.4 the previous month. Japanese consumers' outlook regarding overall livelihood, income growth, employment, and willingness to buy durable goods declined across the board. The cause for recent pessimism towards overall economic health has largely been steep oil prices, which has made consumers apprehensive of the negative effects on their standard of living. As businesses scaled back to accommodate higher costs in production, workers became less optimistic of growth in employment and wages, dampening the confidence index even further. The negative outlook regarding employment and income, in turn, resulted in a reduced inclination to purchase big-ticket durable items. Consumer confidence specific to Tokyo mirrored the nationwide index, with a poor outlook of income growth having the greatest negative effect on overall confidence.

Richard Lee is a Currency Strategist at FXCM.