Japanese Household Spending Surges, Exceeding Expectations
TOKYO (Reuters) - Japanese household spending experienced a significant uptick in December, marking the first increase in five months and surpassing market forecasts.
According to data released by the Ministry of Internal Affairs on Friday, consumer spending climbed 2.7% year-over-year in December, significantly outperforming the median market prediction of a 0.5% rise. On a seasonally adjusted month-over-month basis, spending surged by 2.3%, contrasting with the anticipated 0.2% decline.
Consumption and wage trends are closely monitored by the Bank of Japan (BOJ) to assess economic stability and guide decisions on further rate adjustments. In January, the BOJ raised interest rates to 0.50%, the highest in 17 years, indicating confidence that rising wages will maintain inflation within its 2% target.
Recent pay data released on Wednesday revealed a 0.6% year-over-year increase in inflation-adjusted wages due to winter bonuses. Government officials expressed optimism that the momentum for wage hikes is gaining traction.