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Japan consumers haven't been this confident in 7 years

Tuesday, 23 Jul 2013 | 12:00 AM ET
Asia leads in consumer confidence: Nielsen
Vishal Bali, Managing Director, Consumer Insights business at Nielsen says consumers are more optimistic in Asia.

Consumer confidence in Japan rose to its highest level in over seven years during the second quarter, a survey by market research firm Nielsen showed on Tuesday, as the country undergoes an economic revival led by Prime Minister Shinzo Abe.

Japan's consumer confidence index rose five points to 78, its highest reading since the first quarter of 2006, according to Nielsen's quarterly survey of consumer confidence and spending intentions.

However, that figure still trails behind the global average of 94. Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

(Read more: Is it 'all systems go' after Abe's big election win?)

The perception of Japan's job market has shown steady improvement, the survey showed, with 30 percent of consumers positive on their employment prospects, up from just 4 percent in the fourth quarter of 2012.

This is in line with anecdotal evidence of a rise in summer bonuses. A recent survey by Nippon Life Insurance showed that nearly 40 percent of employees got a bigger bonus this year than in 2012, local media reported.

Among the top concerns for Japanese consumers were increasing utility bills, rising food prices and health.

World's most upbeat consumers are...

A shopper picks up two boxes of PT Indofood at a supermarket in Jakarta.
Dimas Ardian | Bloomberg | Getty Images
A shopper picks up two boxes of PT Indofood at a supermarket in Jakarta.

The survey, which polled more than 29,000 online consumers in 58 countries, found that Indonesia was home to the world's most optimistic consumers.

Indonesia reported the highest index of 124, rising two points from the first quarter, followed by the Philippines, which rose three points to 121.

"Overall, Southeast Asian consumers are feeling optimistic about the economic outlook compared to the rest of the world," said Vishal Bali, managing director of Nielsen's Consumer Insights business in Southeast Asia, North Asia and the Pacific.

(Read more: An Asian economy's huge move to lure capital back)

"Minimum wages are increasing, as are foreign investments, and a growing numbers of consumers are entering the middle class, and this is no doubt fueling the positive outlook we are observing," he said.

As for where consumers in the region spend their spare cash, Nielsen said the two most popular areas are holidays and new technology. Around a third of Thai, Vietnamese, Indonesian and Filipino consumers spend their extra cash on new technology products, compared to the global average of just 25 percent.

However, the three areas where consumers have cut back on spending are new clothes, out-of-home entertainment, and gas and electricity usage.

(Read more: Hold that applause: Japan faces acid test in reform)

"As the middle class population across Southeast Asia continues to grow at a rapid pace, consumer spending in these markets is reflecting their new found wealth. How they choose to spend their cash, however, will be underpinned by an air of caution, as financial security continues to be a high priority," Bali said.

By CNBC's Ansuya Harjani. Follow her on Twitter: @Ansuya_H