Over half of households in Japan feel financially worse off from previous year, survey

More than half of households in Japan feel that they are financially worse off compared to a year ago, according to a recent Bank of Japan survey. 

In the latest edition of the Bank of Japan’s Survey on the General Public's Views and Behavior, 56.2 percent of respondents said they have the impression that their household circumstances have become worse off compared to one year ago. Only 4.1 percent of respondents said that they are now better off while remaining respondents said it was difficult to say.

Calculated as the proportion of respondents whose household circumstances "have become better off" minus the proportion of those whose "have become worse off,” the central bank’s latest household circumstances diffusion index stands at  minus 51.2 percentage points.  

It was only in September 2021 that the index stood at minus 29.5 percentage points, the highest level reached since 2006 when the survey took on its current format. The index dropped to a record low of minus 62.6 percentage points in September 2008 when Japan was in a period of recession. 

Over 30 percent of respondents to the latest survey said that their household income has decreased from a year ago. Over the same period spending increased for nearly 60 percent of households.

Japan's core consumer prices rose 3.1 percent in 2023, the fastest pace of increase in over 40 years, according to reports. It seems that this increase hasn’t gone unnoticed by the public. According to the Bank of Japan survey, 65.6 percent of respondents feel that price levels in Japan have risen significantly over the last year. 29.4 percent feel they have risen slightly. 

In its latest Outlook for Economic Activity and Prices report, published Wednesday, the Bank of Japan said that it expects the year-on-year rate of increase in the consumer price index to be above 2 percent through FY2024 as past rises in import prices continue to have an albeit waning effect on consumer prices and the effect of government measures over the previous year to keep CPI inflation down weakens.

Despite words of encouragement in the bank’s report that “Japan's economy is likely to continue recovering moderately for the time being,” public feeling towards the current economic conditions is largely negative with nearly 70 percent of survey respondents saying that they feel the conditions are at least somewhat unfavorable. 

The Bank of Japan’s 96th Opinion Survey on the General Public's Views and Behavior was carried out from November 9 to December 5, 2023, targeting individuals living in Japan at least 20 years of age. Over 2,000 valid responses were provided.