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Resurgence of COVID-19 cases stalls consumer confidence in Japan

The Japanese government has downgraded its basic assessment of the index of sentiment after Japan’s consumer confidence worsened in January for the second straight month amid a resurgence of coronavirus infections and higher consumer prices. This is the first time the Cabinet Office downgraded its assessment in eight months. With the spread of the highly transmissible Omicron variant, the government decided to put Tokyo and other prefectures under a coronavirus quasi-state of emergency. In addition to increasing COVID-19 cases, the government also said that price hikes of daily necessities since last year dampened sentiment. The survey showed a total of 89.7% of households expected consumer prices to rise in the year ahead, with 31.3% predicting it to accelerate by 5% and higher. The consumer confidence survey covered 8,400 households, including 2,688 single-member households.

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