Wednesday, May 18, 2022

Japan August household spending seen falling for 11th straight month: Reuters poll By Reuters

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© Reuters. FILE PHOTO: A woman chooses clothes at a shop in Tokyo

TOKYO (Reuters) – Japanese household spending is expected to have fallen for a 11th straight month in August, a Reuters poll found on Friday, suggesting the coronavirus crisis is still weighing heavily on consumer confidence.

Analysts say the economy is rebounding gradually after suffering its worst post-war contraction in the second quarter, but the jobs and wage situation remain weak.

New COVID-19 cases in Japan have been on a general downward trend recently but appear to be levelling off.

Household spending likely fell 6.9 % in August from a year earlier, the poll of 14 economists showed, after a 7.6 % fall in July.

Compared with the previous month, household spending is forecast to have risen 3.2% in August from a 6.5% decline, the poll found.

“As the coronavirus cases resurged in Japan, people’s self-restraint stance towards spending on entertainment and tourism persisted,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Wage pressures such as lower summer bonuses are expected to result in lacklustre consumer spending for some time, he added.

The government will announce household spending data at 8:30 a.m. on Oct. 9 (2330 GMT, Oct. 8).

The government is continuing to urge restaurants and shops to take measures to prevent infections, such as giving enough distancing and good ventilation to customers.

Other data next week is expected to show the current account balance was in a surplus of 1.98 trillion yen ($18.74 billion) in August, up from 1.47 trillion yen in July, partly helped by a pickup in exports on the back of the global economic recovery, analysts said.

The finance ministry will release the current account balance on Thursday.

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