Tokyo, Japan – Japanese consumer sentiment took a hit in January, according to a government survey released on [date]. The Cabinet Office reported that the consumer confidence index declined 1.0 point to 35.2, marking a second consecutive monthly drop.

The decline was attributed to soaring prices, particularly for fresh food and rice, which outpaced wage growth. This has led to a growing pessimism among consumers about their future financial outlook.

All four components of the consumer confidence index—household finances, income expectations, employment conditions, and durable goods purchases—showed declines. Consumers expressed increased concern about the rising cost of living and became more cautious about making large purchases.

While the percentage of consumers expecting prices to rise over the next year decreased slightly, the proportion anticipating a significant price hike of 5% or more jumped to the highest level since June 2023. This suggests that inflation remains a major concern for Japanese households.

The Cabinet Office attributed the weakening consumer sentiment to a "hesitation" in the economy, marking the first downward revision in the outlook in eight months.