Japanese consumers—still not confident

Japanese consumers are on their way to mark decades of pessimism in 2016, until things change drastically. According to latest data, released for the month of December Japanese consumer confidence improved but still far away from levels that mark optimism.

The consumer confidence index compiled by the Cabinet Office for December recorded a score of 42.7, up from 42.6 in November. While it is the highest reading since November 2013, it is still far from 50 mark, which indicates optimism.

Key question here is - how can the consumers be spendthrift, if they are still not confident. Last time the number was above 50 was back February 2006, before financial crisis. In this front, Abenomics, of which Bank of Japan's (BOJ) record easing is part of, failed completely in this front, even after more than three years of existence.

Bank of Japan is looking to boost inflation in economy, but it might still remain far apart if it is not consumption driven and consumers so far have resisted or scaled back their spending in response to rising prices.

Japanese benchmark stock index, Nikkei is down close to 9% this year so far and it is down another 1.1% today leading Yen to rise close to 2.5% this year so far.