Japan’s household spending seen rising for first time in 14 months: Reuters poll
2024.05.31 01:43
TOKYO (Reuters) – Japan is expected to post its first year-on-year rise in household spending in 14 months, a Reuters poll showed on Friday, although the tepid growth is likely to highlight persistent weakness in the consumer sector.
Spending probably rose 0.6% year-on-year in April, according to a Reuters poll of 17 economists, following a 1.2% decline in March. It would mark the first increase since February 2023.
On a seasonally-adjusted month-on-month basis, all household spending likely edged up 0.2% in April, slowing from a 1.2% increase in the previous month but posting a third straight monthly gain.
The households speeding data is due at 8:30 a.m. June 7/2330 GMT June 6.
“Considering the underlying price hikes, we can only judge consumption shows no sign of putting the brakes on worsening,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Although annual wage talks resulted in more than 5% wage hikes, households have not yet loosened the purse strings, so the pay raise has not helped boost consumption. The April spending data signals sluggish consumer spending.”
Weak private consumption is a source of concern among policymakers striving to achieve sustainable economic growth accompanied by solid wages and durable inflation, which are prerequisites for normalising of monetary policy.
The Bank of Japan (BOJ) in March raised rates for the first time since 2007 in a landmark shift away from ultra easy monetary policy. Investors are seeking clues on exactly when the BOJ will raise interest rates further.
Japan’s economy contracted 2% annualised in the first quarter as sharp yen declines pushed up costs and forced consumers to cut spending.
