Today we had further evidence of the improvement in Japanese consumer confidence - something still new, and still genuinely surprising.
After last week's modest recovery in the consumer confidence index, we got more dramatic confirmation with the release of September's pavement-level Economy Watchers indexes. The assessment of current conditions improved sharply, up 5.4pts to 49.3, which was the highest since April 2018, The outlook rose 5.9pts to 48.3, which was the highest since February 2019. The biggest improvements in outlook came in employment, which rose 7.2pts to 48.9, and the household outlook, which was up 6pts to 48.5. The outlook for business also rose 5pts to 47.4, with manufacturing up 5.2pts and non-manufacturing up 4.4pts.
This recovery in confidence coincides with the very sharp recovery in trade numbers in September, which I talked about yesterday. That included exports down only 1.9% yoy in yen terms, or 0.3% in dollar terms, with a monthly movt 3.5SDs above historic seasonal trends.
Still, overall, the improvement in Japan's outlook has rather crept up on me: with the exception of the rise in money and lending numbers, it's been hard to find any consistent evidence of recovery in either industrial data, or domestic demand indicators. But, when I look at my Shocks & Surprises index for Japan, I find that actually, when you strip out the volatility, you discover that Japan's 12m index has made it into positive territory during the last few weeks for the first time since April 2018.
