Japan March Household Spending Rises 7.2 Percent in March

Average Japanese monthly household spending jumped at its quickest pace in 39 years, up a price-adjusted 7.2 percent in March from a year earlier to 345,443 yen, ahead of the first consumption tax hike in 17 years on April 1, the government said Friday.

The average monthly income of salaried households, however, fell 3.3 percent in real terms to 438,145 yen, the Ministry of Internal Affairs and Communications said in a preliminary report.

The results came as fears intensified that the 3-percentage-point tax hike to 8 percent would stifle the nascent economic recovery, as wages have shown little sign of growing at a pace that can ease the negative impact of the tax increase on consumer spending and investment.

“A major reason behind the surge in household spending in March was a rush in demand prior to the consumption tax hike,” a ministry official briefing reporters said, adding, “We have to pay attention to how big the negative reaction will be and how long it will last.”

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza