March 1, 2024

Quake Battered Japan Consumer Confidence in March

HONG KONG — Japanese consumer confidence fell in the immediate aftermath of the devastating earthquake and tsunami last month, highlighting how the disaster’s economic and psychological impact extended beyond the stricken areas and into the wider fabric of the Japanese society.

Households across the nation became considerably less willing to purchase consumer durables and people were more worried about their jobs, incomes and overall livelihood, according to a survey published by the cabinet office Tuesday.

An overall index of consumer confidence
compiled by the office slumped from 41.2 in February to 38.6 in March, a reading that echoed the sentiment levels recorded during 2009, when the impact of the global financial crisis was still keenly felt in Japan.

The survey of 6,720 households was conducted on March 15, providing a snapshot of the consumer mood in Japan just days after the earthquake and tsunami slammed northeastern Japan on March 11. Many Japanese, out of respect for the victims, have also shied away from making luxury or big-ticket purchases.

Separate surveys of merchants and businesses around Japan likewise have shown that companies are intensely worried about how the disaster and the lingering crisis at the Fukushima Daiichi nuclear power plant will affect their sales, earnings and production capacities.

Economists say that both business and consumer sentiment has stabilized and has even begun to recover in recent weeks, and that the results of surveys conducted shortly after the quake do not accurately reflect the sentiment that prevails now, more than five weeks after the disaster.

The crowds in Tokyo’s main shopping districts, for example, appear to have swelled nearly back towards pre-quake levels; many expatriate residents who had left Japan at the height of the worries about radiation leaks from the nuclear power plant have returned.

Transaction volumes at the Tsukiji wholesale fish market have returned to pre-quake levels, a sign people are eating sushi again despite radiation concerns, Kyodo reported on Tuesday.

Still, the quake and the power shortages that have followed it will leave a marked dent on business activities and company earnings across Japan.

Overseas tourists have been slow to return to the country. Several retailers have said their sales slumped after the quake, and many manufacturers are still struggling to ramp up operations at factories that were closed because of the post-quake disruption to power supplies and the deliveries of spare parts and components.

Sony Ericsson, for example, on Tuesday said the March 11 disaster had made for a “challenging quarter,” and that it was experiencing some disruptions to its supply chain. The company, which makes mobile phones, reported net earnings of €11 million, or $15.6 million, for the first three months of 2011, beating analysts’ expectations.

Keith Bradsher and Andrew Pollack contributed reporting from Tokyo.

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