Japan’s household spending surged in March at the fastest pace in nine years in a sign that Prime Minister Shinzo Abe’s bold efforts to end two decades of stagnation are lifting consumer confidence and setting the stage for an economic revival.
A recent run of data has provided encouraging early hope that Abe’s push for aggressive fiscal and monetary policies to get the world’s third-largest economy motoring is having the desired effect.
Separate data on Tuesday also showed the jobless rate fell to the lowest in more than four years, providing another piece of evidence that domestic demand could play a critical role in underwriting economic growth in coming months.
While Japan’s industrial production rose less than expected in March due to tepid demand overseas, economists are confident that exports and factory output will eventually pick up due to a weaker yen.
On the whole, the figures suggest that expectations for Abe’s combination of fiscal spending, monetary stimulus and structural reforms, known as “Abenomics,” are having a positive impact on the household sector although the corporate sector is lagging behind.
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