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60% of Japanese cut spending after tax hike: BOJ survey

JIJI

A Bank of Japan survey revealed Thursday that 59.8 percent of respondents tightened their purse strings after the consumption tax hike in April last year.

Of them, 75.3 percent said they were still curbing spending, according to the survey, which was conducted between Feb. 6 and March 5 on 4,000 adults nationwide, with valid responses given by 2,223.

In the latest quarterly study on the general public’s views and behavior, the central bank asked for the first time ever if the respondents changed their consumption attitudes after the tax rate increase from 5 percent to 8 percent.

As a result, 14.8 percent were found to have curbed spending and a further 45 percent said they had done so some extent. On the other hand, no attitude change was reported by 39.6 percent.

Consumers became more reluctant to spend particularly on clothing, shoes, dining and travel, according to the survey.

It also found that the proportion of respondents seeing an improvement in economic conditions from a year earlier increased, while that of respondents saying the conditions worsened declined.

This led the diffusion index, which represents the gap between those proportions, to improve to minus 24.6, from minus 32.9 in the previous survey, showing the first upturn in four quarters.