Japan consumer confidence drop

January 8, 2026 at 21:00 UTC

5 min read

Japan consumer confidence index drops to 37.2, impacting Asian equities and market sentiment

Key Points

Japan's December consumer confidence unexpectedly fell to 37.2, which pressured Japanese equities and contributed to Asia's underperformance.
The ECB's consumer expectations survey showed steady inflation expectations and softer growth outlooks, which reinforced measured-easing pricing and left European markets modestly higher.
The US trade deficit narrowed to its smallest since 2009 on lower imports, which dampened US risk appetite and left US equities mixed.
Energy, Consumer Defensive and Materials outperformed, which lifted sector returns, while Technology and Healthcare lagged; NEOG and ONDS led gainers and RGC and HYMC were the largest decliners.

Global Market Summary

US equities were mixed, with the S&P 500 (SPX) down 0.02% and the Nasdaq Composite (^IXIC) down 0.49% as reports the US trade deficit narrowed weighed on risk appetite. European markets were modestly higher with the CAC 40 (FRA40) up 0.12%, the DAX (DAX) roughly flat at +0.02% and the FTSE (UKX) marginally lower (-0.03%) after an ECB consumer expectations survey reinforced a steady disinflation path. Asia underperformed as Japan's Nikkei (NKY) fell 1.63% and Hong Kong's Hang Seng (HSI) dropped 1.17% after Japan's consumer confidence unexpectedly weakened to 37.2, while the Shanghai Composite (000001.SS) slipped 0.07%.

Top Movers

Top sectors: Energy (XLE +3.36%), Consumer Defensive (XLP +2.38%) and Materials (XLB +1.66%) outperformed. Lagging sectors included Technology (VGT -1.60%) and Healthcare (XLV -0.81%). Notable stock movers: NEOG (+29.21%) and ONDS (+15.72%) led gainers while RGC (-21.77%) and HYMC (-13.62%) were the largest decliners.

Macro highlights

Japan's December consumer confidence unexpectedly fell to 37.2 (consensus 37.8), a miss versus 37.5 that pressured Japanese equities and regional risk sentiment. The ECB's November Consumer Expectations Survey showed steady inflation expectations and softer growth outlooks, reinforcing market pricing for measured easing in the euro area. Separate posts noted the US trade deficit narrowed to its smallest since 2009 on lower imports, a development that can influence GDP and currency flows and likely contributed to softer US risk appetite.

News that moved markets

Several completed transactions closed today, including 11:11 Systems' acquisition of Ntirety, ZenaTech's 20th acquisition, AppYea's closing of the Techlott transaction, and Diginex's acquisition of The Remedy Project. Announced deals included Brennan Investment Group's purchase of a 10-building East Coast industrial portfolio and the merger of Verana Health with COTA, among other strategic acquisitions.

Upcoming session watchlist

CN Inflation Rate YoY (DEC) — consensus 0.9% vs 0.7% prior, Jan 9, 01:30 AM | Measures consumer price inflation and near-term price pressure.
DE Balance of Trade (NOV) — consensus €16.7B vs €16.9B prior, Jan 9, 07:00 AM | Shows export-import balance and signals external demand for German goods.
US Housing Starts (SEP) — consensus 1.31M vs 1.307M prior, Jan 9, 01:30 PM | Measures housing demand and near-term construction activity in the residential sector.
US Non Farm Payrolls (DEC) — consensus 60K vs 64K prior, Jan 9, 01:30 PM | Gauges labor market strength and monthly job growth trends.
US Unemployment Rate (DEC) — consensus 4.5% vs 4.6% prior, Jan 9, 01:30 PM | Reports unemployment share and signals labor market slack and demand balance.
CA Unemployment Rate (DEC) — consensus 6.7% vs 6.5% prior, Jan 9, 01:30 PM | Reports unemployment share and provincial labor market conditions and trends.
US Michigan Consumer Sentiment Prel (JAN) — consensus 53.2 vs 52.9 prior, Jan 9, 03:00 PM | Preliminary gauge of consumer sentiment and near-term household spending expectations.

Key Takeaways

US equities closed mixed after the US trade deficit narrowed on lower imports, which weighed on risk appetite and left the S&P 500 (SPX) near flat while the Nasdaq underperformed.
European markets were modestly higher after the ECB consumer expectations survey reinforced a steady disinflation path, with the CAC outpacing a roughly flat DAX while the FTSE was marginally lower.
Asia underperformed as Japan's Nikkei fell 1.63% and Hong Kong's Hang Seng dropped 1.17% after Japan's consumer confidence unexpectedly weakened to 37.2.
Several completed and announced transactions closed and were announced today, including 11:11 Systems/Ntirety, ZenaTech, AppYea/Techlott and Diginex/Remedy, which underscored active deal flow.