Japan’s Households Most Upbeat Since 1998 as Joblessness Falls

(Bloomberg) -- Japanese households are the most upbeat since at least 1998 as the labor market tightens and muted inflation boosts their purchasing power, a Bank of Japan survey found.

The index for impression of livelihood rose to -32.4 in March, the highest on record dating to 1998, according to the quarterly survey released Friday. Sentiment toward income was at the highest on record dating to 2006 and confidence regarding employment stood at the second-highest level since 2006, the survey found.

The data on rising confidence come as the BOJ prepares to convene a policy meeting later this month. It is widely expected to continue with its current aggressive easing program. Demographics have helped push the jobless rate down to 2.8 percent, though wage growth remains weak.

A Cabinet Office report on Thursday showed consumer confidence at the highest level since September 2013.

“Japan's economy is likely to continue its recovery,” said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG. “Low inflation is helping households. So we have to see how their sentiment changes once inflation rises thanks to oil and a weak yen.”

The BOJ survey found that the number of households expecting prices to rise over one year and five years increased for the first time since June 2015. However, they expected prices to rise 2 percent annually over both time periods, the same as in the previous survey.

The BOJ received 2,174 responses to the poll which, was conducted Feb. 8-March 6.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net.

To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net, Henry Hoenig, James Mayger