Japanese credit card transactions will accelerate this year as rising stock prices boost consumer confidence and spending, according to Sumitomo Mitsui Financial Group Inc.’s card unit.
“Luxury items are selling well,” Hideo Shimada, president of Sumitomo Mitsui Card Co., said in Tokyo this month. “High stock prices push the rich to buy things, and that’s boosted consumer spending all over Japan,” said Shimada, who is also chairman of the Japan Credit Card Association.
Lower- and middle-income households have also increased card transactions, he said, as Prime Minister Shinzo Abe’s policies of fiscal spending and monetary easing help to revive economic growth. The Nikkei 225 stock average gained 39 percent this year, making Japan the world’s best-performing major stock market.
“Even though salaries have yet to rise under ‘Abenomics,’ people are getting more confident about the future,” Shimada said of Abe’s economic policies. Consumer sentiment advanced to a four-month high in September, according to government data released Thursday.
Credit card spending jumped 9.8 percent in June from a year earlier, the fastest pace in more than a year, and climbed 9 percent in July, trade ministry data show. Households’ financial assets rose 5 percent to ¥1.590 quadrillion in the quarter that ended on June 30 from a year earlier, according to Bank of Japan figures.
Shimada expects households to front-load spending this year in anticipation of a sales tax increase in April, with card transactions to slow afterward. Abe this month ordered a rise in the levy to 8 percent from 5 percent to rein in the world’s biggest debt burden.
“In the long term, the tax is necessary as part of a sound fiscal policy,” Shimada said.