Japan March household spending posts first fall in 3 months

JAPAN’S household spending fell in March for the first time in 3 months, though the drop was smaller than expected, as consumers remained wary of rising living costs despite some easing of Covid-19 curbs.

Household spending declined 2.3 per cent in March from a year earlier, government data showed on Tuesday (May 10), slower than Reuters’ median market estimate for a 2.8 per cent drop and following 1.1 per cent growth in the previous month.

On a seasonally-adjusted, month-on-month basis, spending rose 4.1 per cent in March, stronger than the forecast 2.6 per cent growth.

Japan’s consumer inflation is at a multi-year-high, fanned by the war in Ukraine and the yen’s rapid decline to 20-year-lows.

In March, Japanese real wages fell for the first time in 3 months as inflation outstripped steady nominal wage growth.

Economists expect the world’s third-largest economy to have contracted an annualised 0.7 per cent in the January-March quarter, followed by a 5.1 per cent rebound in April-June, according to the latest Reuters poll. REUTERS