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Japan consumer confidence plunges to 11-year low amid virus pandemic

Fewer people than usual walk in front of Tokyo's Shibuya Station on April 5, 2020. (Kyodo)

TOKYO (Kyodo) -- Japan's consumer confidence in March plummeted to an 11-year low amid the global coronavirus pandemic, government data showed Tuesday.

    The seasonally adjusted index of sentiment among households made up of two or more people stood at 30.9, the lowest since 29.4 logged in March 2009 when Japan and the rest or the world were in the throes of the global financial crisis, according to the data from the Cabinet Office.

    Falling for the third straight month, the index, which suggests consumers' economic expectations for the coming six months, plunged from February's 38.3. A reading below 50 suggests pessimists outnumber optimists.

    The drop of 7.4 points is also the biggest since April 2004, when the Cabinet Office began conducting this survey every month.

    "I can't say anything for sure because we don't ask respondents about the reasons for their answers, but given that the decline was as sharp as this, I believe the coronavirus spread affected the results," a government official told reporters.

    The Cabinet Office downgraded its basic assessment, saying that consumer sentiment has been "worsening," a change from that it has "stalled" in February.

    It is the first time since April 2011 that the office has used this expression.

    Among the survey's four components, consumers' assessment of employment conditions also showed its biggest-ever drop, down 11.6 points at 27.9, while that of livelihoods fell 7.5 points to 30.0, and that of income growth decreased 4.9 points to 34.8.

    Their readiness to buy durable goods stood at 31.0, down 5.4 points.

    In the survey, 70.3 percent of households said they expect consumer prices to rise in the year ahead, compared to 76.5 percent in February, and 11.0 percent said they expect prices to fall, up from 5.5 percent in the previous month.

    The consumer confidence survey, conducted on March 15, covered 8,400 households, including 2,688 single-member households, with valid responses received from 6,806, or 81.0 percent.

    The official said that the latest data are not technically comparable to those of March 2013 or earlier, when the survey was conducted by interview and tended to produce higher readings than those since the switch to the current online format.

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