Due in part to the correction of the yen’s appreciation and the rise in stock prices since the end of 2012, business and consumer sentiment has improved, and this improvement is likely to help underpin private consumption for the time being and gradually entice firms to increase their spending.
Increased private consumption is particularly evident among the middle-aged and the elderly, who hold more stocks than other age groups. Consumption activity of the baby-boom generation is expected to remain firm due to their higher propensity to consume than other generations and to firms’ efforts to capture new demand.