Boston, MA -- (SBWIRE) -- 08/15/2013 -- Our outlook on consumer confidence in Japan is slightly more upbeat when compared with previous quarters, as we believe that Prime Minister Shinzo Abe's direct approach in terms of encouraging wage increases and business spending is likely to bolster growth in private consumption and investment over the near term. With leading indicators showing much-sought-after improvements, we believe the optimism following the regime change in Japan will help to drive a pickup in economic activity in 2013.

As such, we have revised up our forecast for 2013 GDP to 1.4%, from a previous forecast of 0.9%. That said, we believe these measures are unlikely to replicate the boost in growth that previous fiscal subsidies created. As such, we have revised up our forecast for private consumption growth to come in at 1.5% in 2013, up from our previous forecast of 0.6% but much lower than the 2.3% recorded in 2012.

Headline Industry Data (local currency)

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- 2013 per capita food consumption = +0.2%; compound annual growth rate (CAGR) to 2017 = +0.4%
- 2013 alcoholic drinks value sales = +0.3%; CAGR growth forecast to 2017 = +0.8%
- 2013 soft drinks value sales = +3.5%; CAGR growth forecast to 2017 = +3.5%
- 2013 mass grocery retail sales = +0.6%; CAGR growth forecast to 2017 = +0.4%

Key Industry Trends

Danone To Boost Yoghurt Production: In April 2013, it was reported that French dairy company Danone is to invest US$141.5mn in Japan between 2013 and 2017 to increase yoghurt production capacity in the country by 50%. The company is also likely to invest an additional US$141.5mn between 2017 and 2022 to introduce three new product lines to its eight existing lines at the Tatebayashi plant in Gunma Prefecture. Danone aims for this investment to double the plant's current production capacity.

Weaker Yen Could Provide Boost To Craft Beers: In June 2013, The Japan Times reported that the president of Japan-based Yo-Ho Brewing, Naoyuki Ide, said a weaker Japanese yen will boost sales of craft beers, as foreign beers will become significantly more expensive. In order to meet this anticipated rise in demand for the beer, Ide is increasing production capacity at its microbrewery in Nagano by 50%. The weaker Japanese yen and a hike in consumer spending may strengthen Japan's craft-brewing industry, which had already been outperforming before Prime Minister Shinzo Abe launched a campaign to stimulate the economy and end deflation.

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