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Japan's Nov household spending falls for third straight month
[TOKYO] Japan's household spending fell more than expected in November to mark the third straight month of year-on-year declines, government data showed on Friday, adding to growing uncertainties about the country's fragile economic recovery.
Household spending in November fell 0.6 per cent from a year earlier, more than a median market forecast for a 0.1 per cent drop and bigger than the previous month's 0.3 per cent decline.
"Consumption continues to lack strength. External demand is weakening but we can't expect the economy to get much support from domestic demand either," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
"The economy seems to be slowing or stalling, though it's not worsening yet."
A pick-up in consumption is crucial for the Bank of Japan to achieve its long-elusive 2 per cent inflation target. Weak spending has discouraged firms from raising prices for fear of losing cost-sensitive households as customers.
Japan's economy shrank in 2018's third quarter and some analysts warn that any rebound in October-December could have been weaker than initially expected, as trade protectionism and slowing global demand hurt business sentiment.
Fears of a global economic slowdown and growing signs the US Federal Reserve will pause its cycle of interest rate hikes have boosted investor demand for safe-haven currencies, leading to an unwelcome rise in the yen that could hurt Japan's export-reliant economy.
The BOJ on Thursday maintained its upbeat view on regional economies of the country but warned that more companies were complaining of the fallout from the US-Chinese trade frictions than three months ago.
The household spending data will be among factors the central bank will scrutinize at its rate review on Jan 22-23.