TOKYO (Reuters) – Japanese household spending rose for the first time in five months in year-on-year terms in December and at a much faster-than-expected pace.
Consumer spending climbed 2.7% in December from a year earlier, data from the internal affairs ministry showed on Friday, better than the median market forecast for a 0.5% uptick. On a seasonally adjusted month-on-month basis, spending increased 2.3%, versus an expected 0.2% fall.
Consumption and wage trends are key factors the Bank of Japan (BOJ) is watching to gauge economic strength and determine the need for additional rate hikes.
The BOJ raised interest rates to 0.50% in January, the highest in 17 years, signalling its confidence that rising wages will keep inflation stable around its 2% target.
December’s pay data released on Wednesday showed inflation-adjusted wages rose 0.6% year-on-year thanks to a winter bonus bump, with government officials expressing optimism that wage hike momentum is growing.
(Reporting by Satoshi Sugiyama; Editing by Chang-Ran Kim and Sam Holmes)
Comments