Japanese consumers less confident than investors – Capital Economics

FXstreet.com (Barcelona) - Julian Jessop, Chief Global Economist at Capital Economics notes that the further decline in the headline measure of consumer confidence in December, from 39.4 to a 2012 low of 39.2, is slightly disappointing and contrasts with the optimism in the financial markets.

He sees that the consumer survey was taken on the 15th so will not have fully reflected the outcome of the Lower House elections (on the 16th), let along January's fiscal stimulus, but the Nikkei had already begun its strong rally in anticipation of an LDP victory. He adds that hopefully the January consumer survey will be better, however, today's results are a reminder that the fundamentals of the household sector are still weak.

More positively, the value of core machinery orders (excluding ships and utilities) rose by 3.9% MoM in November, building on a 2.6% gain in October. He adds, "What's more, these data were taken before the big move in the yen. The recent gains do follow two months where the falls were even bigger, so the level of orders is still lower than it was in July. Nonetheless, this key indicator of business investment does at least appear to have bottomed out. The data are volatile from month to month but an unchanged figure m/m in December would now imply a gain of around 1% q/q in the fourth quarter as a whole."