Key insights
- Japanese household spending fell 2.9% year-on-year in March, exceeding expectations. This may influence the Bank of Japan's decision on interest rates in June. While real wages rose, weak spending data adds to concerns about the strength of the Japanese economy, potentially impacting global market sentiment and risk appetite, albeit mildly for US equities.
TOKYO, May 12 (Reuters) - Japanese household spending fell more than expected in March from a year earlier, government data showed on Tuesday, extending declines to a fourth straight month.
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Consumer spending fell 2.9% year-on-year, internal affairs ministry data showed, compared with the median market forecast for a 1.3% drop.
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On a seasonally adjusted, month-on-month basis, spending dropped 1.3% versus an estimated 0.6% rise.
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The indicator will be among factors the Bank of Japan will scrutinise as it decides whether to raise interest rates in June or hold off until later.
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Japan’s real wages rose 1% in March from a year earlier for a third straight month of gains.