In recent months, consumer sentiment has been improving steadily, partly due to the recovery in stock prices, and the Consumption Activity Index (CAI), which the Bank compiles by combining various sales and supply-side statistics, has picked up since last summer (Chart 7). Japan's economy is more firmly making steps toward a recovery.
More generally, the work carried out by MaRs researchers shows how the predictive information can be improved by using individual balance sheet data of financial firms combined with traditional macro-financial variables.