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Japan's May consumer confidence remains near record low

People wearing face masks keep social distancing as they wait to buy sushi in Yokohama, on May 28, 2020. (AP Photo/Koji Sasahara)

TOKYO (Kyodo) -- Japan's consumer confidence rose for the first time in five months in May but remained near a record low, government data showed Friday, as the impact of the coronavirus pandemic lingers even after a nationwide state of emergency was lifted.

    The seasonally adjusted index of sentiment among households made up of two or more people stood at 24.0, up from an all-time low of 21.6 in April, according to the Cabinet Office.

    Despite the rise, the latest figure is the second lowest since April 2004, when the survey began on a monthly basis, lower than 27.5 posted in January 2009 in the wake of the global financial crisis.

    The index gives an indication of consumers' economic expectations for the coming six months, with a reading below 50 suggesting pessimists outnumber optimists.

    As the pace of the virus spread slowed, the state of emergency that had weighed heavily on the economy was lifted in most Japanese prefectures in mid-May. The emergency completely ended Monday with the lifting of the measure in the Tokyo metropolitan area and Hokkaido.

    The survey was conducted between May 8 and 20, covering 8,400 households including 1,902 single-member households, with valid responses received from 6,847, or 81.5 percent.

    A government official told reporters that the end of the emergency is believed to have helped improve consumer sentiment, but added the headline figure is "still at a considerably low level."

    Still, the Cabinet Office upgraded its basic assessment, saying consumer sentiment has "remained in an extremely severe situation, but appeared to be bottoming out."

    It said in April that sentiment was "rapidly worsening," the most pessimistic expression the government has ever used.

    "We saw significant drops in the figures for March and April, but the current situation seems a bit different from then, so we changed the assessment," the official said.

    Among the survey's four components, consumers' assessment of livelihoods and that of income growth also increased for the first time in five months, up 3.1 points to 25.0, and up 1.5 points to 27.8, respectively. That of employment conditions climbed 1.8 points to 16.8, the first rise in four months.

    Their readiness to buy durable goods rose 3.0 points to 26.3.

    In the survey, 72.3 percent of households said they expect consumer prices to rise in the year ahead, compared with 70.7 percent in April, and 11.1 percent said they expect prices to fall, up from 10.8 percent in the previous month. Another 11.1 percent answered "unchanged," down from 11.4 percent.

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