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

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.