Japan’s August household spending rises faster than expected

[TOKYO] Japanese household spending rose at a faster speed than expected in August, helped by an increase in travel and transportation expenditure, government data showed on Tuesday.

Consumer spending rose 2.3 per cent from a year earlier, rising for the fourth consecutive month, internal affairs ministry data showed. It was slightly better than the median market forecast for a 1.2 per cent rise.

On a seasonally adjusted, month-on-month basis, spending edged up 0.6 per cent, versus an estimated 0.1 per cent rise.

Consumption and wage trends are also among key factors the Bank of Japan is monitoring to determine the timing of the next rate hike.

Japan’s ruling party on Saturday picked hardline conservative and fiscal dove Sanae Takaichi as its head, putting her on course to become the country’s first female prime minister.

Her victory spurred markets to price in the chance of big spending and reduce bets of a rate hike at the BOJ’s next policy meeting later this month.

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The government raised its assessment of consumer spending for the first time since August 2024 in the latest monthly report, reflecting improvement in consumer sentiment following a tariff agreement with the US. REUTERS