Japan’s industrial production (JNIPMOM) and household spending fell more than forecast and inflation surged to a 23-year high on a tax rise that is pinching consumers who have seen limited wage gains.
Production fell 2.5 percent in April from the prior month, the trade ministry said in today, more than a 2 percent drop forecast by economists surveyed by Bloomberg News. Household spending declined 4.6 percent from a year earlier, steeper than a projected 3.4 percent drop, while core consumer prices rose 3.2 percent.
The data show the challenge facing Prime Minister Shinzo Abe as he tries to cap the world’s biggest debt burden while the Bank of Japan carries out record easing to drive inflation. Weak growth next quarter — the period that Abe will look at when deciding whether the economy can bear a further increase in the sales tax — would boost the chances of further fiscal support.