Japanese spending rises unexpectedly in January

[TOKYO] Japan's household spending rose 2.0 per cent in January from a year earlier, according to government data released Friday, suggesting demand is gradually recovering in the world's third-largest economy.

The figure, released by the internal affairs ministry, wrong-footed market players who were expecting a drop of 0.95 per cent.

However, the data are notoriously volatile, with spending down 0.1 per cent in December and up 1.7 per cent in November.

Japan has notched up eight straight quarters of economic growth - the longest positive run since the 1980s when the Japanese economy was the envy of the world.

But it has struggled to oust fears of deflation, failing to achieve the 2.0-per cent inflation rate target set by the central bank, which is thought crucial to boosting the economy.

The government and central bank hope to see a "virtuous cycle", with an export-led recovery having a positive impact on jobs and household income and thereby boosting domestic demand, which accounts for roughly 60 per cent of Japan's economy.

AFP