Spotlight: Japan's consumer confidence drops to 6-month low as "Abenomics" guarantees remain elusive

Japan's consumer confidence fell for the second successive month in November and to the lowest level in six months, the Cabinet Office said here Monday, a further sign that the government's pledges to kickstart the world's third-largest economy remain elusive.

According to the latest government figures, the consumer confidence index dropped 1.4 points from a month earlier to 40.9 in November.

In September, the index, on a seasonally adjusted basis, stood at 43.0.

The current reading marks the lowest since May, when the index also stood at 40.9.

Components that led to the index's decline, the government said, comprised the overall livelihood gauge falling 1.3 points from the previous month to 40.1 in November, with the gauge for income growth standing at 40.4 in the recording month, dropping 0.6 from the previous month.

The Cabinet Office also said that employment and the willingness of consumers to buy durable goods also remained pressured in the recording period, with the gauges standing at 42.5 and 40.5 and falling 2.3 and 1.4 points from the previous month respectively.

The latest data set from the government reflects consumers in the world's third-largest economy feeling constrained by the current situation of the economy.

Consumers are unwilling to spend money as deflation persists, despite the Bank of Japan's numerous efforts to reverse the decades-old deflationary trend, and against a backdrop of stagnant salaries as corporate profits are not being translated into wage increases for employees.

Corporate expenditure remains stifled, economists said, because companies here remain circumspect about their earnings outlook amid both slumping domestic and overseas demand.

Overseas demand is being impacted by a persistently strong yen which is a constant thorn in the side of Japan's export-led economy, which relies on a weak yen to augment the value of yields when repatriated here.

Major growth drivers have yet to be realized to underpin the nation's economy, which is buckling under mounting social welfare costs associated with Japan's rapidly aging and shrinking society.

To this end, international and local economists have long been urging Japan to reappraise its economic policies. Numerous installments of Prime Minister Shinzo Abe's "Abenomics" initiatives have largely been based on economic rhetoric that has yet to come to fruition, including a second installment of a consumption tax hike that has been delayed by 2.5 years.

Abe said the tax hike would go ahead as planned, provided there was no global economic crisis such as the one seen in 2008 and that his policies would ensure that the economy and its consumers would be solid enough to handle the tariff increase, which, as the delay has indicated, is far from the case, as leading economists have consistently attested.

The Cabinet Office's monthly consumer confidence survey in November asked 8,400 households across Japan their feeling towards spending money and the economy in general. The results of the survey are purportedly to enable the government to gain a quick understanding of shifts in consumer perception as a tool to evaluate economic trends.

The response rate of the November study was 66.4 percent, the Cabinet Office said Monday. Endit