Japan’s April household consumption seen up on holiday spending: Reuters poll

May 31, 2019

TOKYO (Reuters) – Japan’s household spending was expected to have risen for a fifth straight month in April, a Reuters poll showed on Friday, offering some relief for policymakers concerned about the impact of global trade frictions on domestic consumption.

Household spending likely grew 2.6% in April from a year earlier, the poll of 15 economists showed, up from a 2.1% in March.

“Consumer spending performed poorly in January-March but the long holiday period appeared to have supported the spending in April,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“We expect consumer spending especially in services improved in April compared with the previous month.”

Japan’s 10-day holiday from late April to early May to celebrate the accession of new emperor helped consumer spending on travel related services, analysts say.

Increases in auto sales due to new models also helped spending.

The government will release household spending data at 8:30 a.m. Japan time on Friday, June 7 (2330 GMT, June 6).

Japan’s economic growth unexpectedly accelerated in January- March but mostly caused by imports declining faster than exports likely reflecting weak domestic demand.

U.S.-China trade frictions are already hurting the economy as Japanese manufactures rely on selling heavy machinery and electronic parts to companies operating in China, which are used to make finished goods.

Barring a major economic shock, Japan’s government plans to hike the sales tax to 10% in October from the current 8%.

But economic uncertainty has bolstered speculation Prime Minister Shinzo Abe may postpone the increase in the tax, which has already been delayed twice.

(Reporting by Kaori Kaneko; Editing by Sam Holmes)

Comments (No)

Leave a Reply