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Bank of Japan’s Standard of Living Survey for September

October 4, 2007
By Ken Worsley


September’s edition of The Bank of Japan’s quarterly 生活意識 (Standard of Living) survey was released today. I always scan straight to the first question: How is the business outlook compared to a year ago? This time:

6.7% said it has gotten better
58.7% said it has stayed the same
34.1% said it has gotten worse

The previous two surveys had showed 11.6% and 11.1% saying that things were getting better, with 23.6% and 23.2% saying that things had gotten worse. The percentage of respondents saying that their household income had fallen against a year ago increased about 5 points to 45%. Those who said they had seen an increase fell from 8.4% to 8.1%.

60% said that prices are higher than a year ago (with 8.6% saying ‘pretty high’), and it seems as though that might be true in terms of food. At the same time, 70% said they believe that prices will be even higher next year. We do know that Japan’s consumer price index has fallen for seven consecutive months, so it may seem worrisome that households are already perceiving that they’re feeling a pinch - whether or not they actually are (They might be, they might not; it doesn’t matter so much as the perception in this case). Non-fresh food prices are rising.

The point is, if consumers are perceiving a pinch while core CPI is falling, this does not bode well for the BOJ’s hawks, who are trying to find the right time to sneak in a rate hike (Do it before Fukui leaves, then after he’s gone you can blame everything on him! Or, don’t do it before he goes, and then blame everything on him!)

5.1% said that the Bank of Japan’s public explanations are easy to understand, while 58.1% said they are difficult to understand. The good news here is that in June, 59.6% said the BOJ was difficult to understand, and in March that figure stood at 63.5%. I don’t know that the BOJ has gone on any sort of public relations campaign, so perhaps it is getting better with its explanations. Or perhaps the people are getting smarter. My money’s on the people.

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