Japan consumers see brighter days

With more money in their pockets, consumers are feeling happier

Japan's improving economy has lifted consumer confidence to levels not seen for 15 years, a report has shown.

The Cabinet Office's sentiment survey, which covers a three-month period and 5,000 households, rose to 48.2 in December, up 3.4 points from September.

Consumers have been getting a boost from higher wages and have picked up spending as company profits recover.

However, the recovery is still fragile and a reading of below 50 means there were more pessimists than optimists.

On a monthly basis, the government's sentiment index dipped by 1.7 points to 46.5 in December.

Analysts said that the monthly figures are more volatile and despite the dip, the overall trend is that consumer confidence is getting more robust.

'Bright factors'

"Consumer sentiment has been improving since about half a year ago," said Taro Saito, an economist at NLI Research Institute.

"The survey was helped by various bright factors such as rises in winter bonuses, talk that raises would be agreed at annual spring wage negotiations, and rising share prices," he explained.

Households were asked to give their views on living conditions, earnings, job prospects and their willingness to buy large consumer products.

Their views could be affected by a Bank of Japan meeting at the end of this week, analysts said.

The bank has hinted that it may consider abandoning its policy of zero interest rates as the economy improves and there are increasing signs that Japan's long period of deflation may be ending.

Markets and consumers will be listening for clues about the outlook for the world's second-biggest economy.