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Japan's November household spending seen falling at slower pace: poll

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Japan's household spending likely fell at a slower annual rate in November as consumers were probably slowly getting over a hike in the sales tax in October, though its effect would still keep a lid on spending, a Reuters poll showed on Wednesday.

[TOKYO] Japan's household spending likely fell at a slower annual rate in November as consumers were probably slowly getting over a hike in the sales tax in October, though its effect would still keep a lid on spending, a Reuters poll showed on Wednesday.

After the increase in tax, household spending fell 5.1 per cent in October, its fastest pace of decline since March 2016. But the poll of 12 economists predicted November would show a fall of 1.7 per cent from a year earlier.

Household spending is expected to have fallen 1.7 per cent in November from a year earlier, the poll of 12 economists showed. In October, it fell 5.1 per cent, the fastest pace of decline since March 2016.

From the previous month, household spending was seen rising 3.4 per cent in November, rebounding from a 11.5 per cent decline in October.

Japan increased the sales tax to 10 per cent from 8 per cent on Oct 1, a move that is seen as critical for fixing the country's tattered finances.

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"The pace of recovery in household spending after it tumbled in October due to the sales tax hike likely be slow," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

"Big falls in consumer spending in October-December can't be avoidable."

The government will publish household spending data at 8.30am on Jan 10 (2330 GMT, Jan 9).

A separate data showed Japan's inflation-adjusted real wages declined at their fastest pace in four months in November, clouding the outlook for an economy already under pressure from a nationwide tax increase.

The economy grew an annualised 1.8 per cent in July-September thanks to resilient domestic demand but economists project a contraction in the fourth quarter as the sales tax hike hurt consumer spending and the US-China trade friction hit exports. 

REUTERS

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