CPI and Household Spending Rises in Japan

123jump.com Staff
29 Feb, 2008
New York City

January core consumer price index rose at 0.8% from a year ago, the fourth monthly rise. Rising food and energy prices are lifting prices across Japan. The nationwide CPI which includes fresh food prices rose at slower pace by 0.7%. Monthly household spending in January rose 3.6%, at a slower pace in December rate of 2.2%. January jobless rate was 3.8%, same as in December month.

[R]5:00AM New York, 7:00PM Tokyo - Japan consumer price index increased 0.8% in January, monthly household spending rose 3.6% in real terms, and jobless rate was same as in December at 3.8%. IHI Corp. and Toshiba Corp are exploring to merge nuclear businesses generating 1 trillion yen.[/R]

Stock averages in Japan ended the week lower after a rising yen took its toll on exporters and on a government report that showed housing starts declined 5.7% on the year in January.

Market Sentiment

In Tokyo trading Nikkei 225 dropped 2.32% or 322.49 at 13,603.02, and the broader Topix Index fell 2.1% or 28.82 to 1,324.28.

In the first section of the Tokyo Stock Exchange 8.8 billion shares worth 1 trillion yen were traded and in the second section 300 shares valued at 4.1 billion yen changed hands.

Of the Nikkei 225 stocks 31 gained, 190 declined, and 4 were unchanged. Sky Perfect JSAT led advancers in the Nikkei 225 index shares with a rise of 2.98% followed by Asahi Breweries increasing 2.79%.

CPI rises 0.8% in January

The Statistics Bureau reported today that Japan’s core consumer price index, excluding fresh food rose 0.8% from a year ago in January.

Food prices rose 0.6% and 0.5% from the previous month and year respectively. However, housing was unchanged for both the month and year. Fuel, light and water charges gained 0.8% on the month and 3.7% from the previous year, while furniture and household utensils fell 0.1% for the month and declined 1.60% from the previous year.

Clothes and footwear slipped 6.9% from the previous month but rose 0.8% from a year earlier. Transport and Communication shed 0.1% on the month and rose 2.6% on the year.

CPI in Ku-area rose 0.4% in February

According the statistics office, preliminary consumer prices in the Ku-area of Japan fell 0.2% from the previous month in February and increased 0.4% from the previous year. Food shed 0.2% from a month earlier but advanced 0.8% from a year ago. However, housing was unchanged.

While fuel, light and water charges were unchanged for the month, the utilities rose 1.5% from 2006. Furniture and household utensils slid 0.9% and 2.9% for the month and year respectively.

Statistics also showed that clothes and footwear declined 3% from the previous month and fell by 1.2% from a year ago.

In addition, transport and communication slipped 0.5% from January and increased 1.6% from 2006.

Incomes fall, Expenditures Rise

The Statistics Bureau also revealed in a separate report on the Family Income and Expenditure Survey that the average monthly consumption expenditures per two or more family household rose 4.5% in nominal terms and 3.6% in real terms from the previous year in January to 309,826 yen. Household spending accounts for 55% of gross domestic product in Japan.

For worker’s households, the average amount of monthly income per household declined 0.5% in nominal terms and 1.4% in real terms from a year earlier to 438,998 yen.

Consumption expenditures further increased 3.9% and 3% in nominal and real terms correspondingly to 341,138 yen.

Disposable incomes also fell 2.8% in real terms from 2006 at 367,083 yen.

Employment Rise 0.7% and Unemployment Falls 3%

The Statistics office reported in the Labor Force Survey today that the number of employed persons in January advanced 0.7% from a year earlier in January to 63.21million, while unemployment fell 3% year-on-year to 2.56 million.

Unemployment rate was at 3.8% in seasonally adjusted terms in January.

Housing Starts Fall 5.7% in January

The Nikkei News reported that the Ministry, Land and Transport reported today that housing starts fell 5.7% at 86,971 units in January from a year ago.

Gainers & Losers

Sky Perfect JSAT led advancers in the Nikkei 225 index shares with a rise of 2.98% followed by gains in Asahi Brewers of 2.79%, in Mitsubishi UFJ Nicos of 2.10%, in KDDI Corp of 2.07, and in West Japan Railway of 1.70%.

Sumco Corp. led decliners in the Nikkei 225 index shares with a drop of 7.51% followed by losses in Resona Holdings of 6.49%, in Sumitomo Osaka of 6.49%, in Denso Corp of 6.40%, and in Sumitomo Realty of 6.40%.

Exporters fell after the yen rose to a three year high at 104.58 from 106.35 against the dollar. Casio Computer declined 3.64%, Toyota Motor Corp. shed 2.71% and Canon Incorporated slumped 2.23%.

Company News

The Yomiuri reported today that IHI Corp. and Toshiba Corp. are negotiating on a comprehensive energy business tie-up, including nuclear power plants, adding that the two companies also are considering a plan to integrate their energy businesses, with Toshiba is likely to merge its nuclear power businesses, and other related ventures, with the new company in the future.

The integrated energy business will have combined annual sales of about 1 trillion yen.