A Bank of Japan quarterly survey for December 2025 showed consumer sentiment rising for two straight quarters, while views on living conditions worsened for the first time in two quarters. The results suggest more people believe the overall economy is improving, though higher prices are burdening livelihoods.
The Bank of Japan released its December 2025 quarterly consumer sentiment survey on January 20, 2026, revealing an improvement in views on economic conditions. The diffusion index (DI) for current economic conditions stood at minus 50.4, up from minus 58.7 in the September 2025 survey. This DI measures the percentage of respondents who feel conditions have improved over the past year minus those who feel they have worsened.
The DI for economic outlooks one year ahead improved to minus 18.3, likely reflecting stronger corporate earnings and rising incomes from wage hikes. In contrast, the DI for living conditions declined to minus 52.2 from minus 51.6 in September, indicating a slight deterioration in personal financial perceptions.
Notably, 95.2% of respondents reported that prices across the nation had risen compared to a year earlier, a trend persisting above 90% for the past three and a half years. The survey targeted 4,000 individuals aged 20 and over nationwide, conducted from November 5 to December 8, 2025, with a 50.4% valid response rate.
These findings highlight a growing optimism about the broader economy amid ongoing inflationary pressures that continue to strain household budgets.