Japanese Household Spending Falls in 2014

Japan’s average monthly household spending in 2014 fell at its fastest pace in eight years, down 3.2 percent in price-adjusted terms from the previous year to 251,481 yen ($2,121), the government said Tuesday.

Many households were reluctant to spend aggressively in the wake of price rises triggered by last April’s consumption tax hike and a weaker yen as well as bad weather last summer, the Ministry of Internal Affairs and Communications said.

The country’s household spending slid for the first time since 2011, when a magnitude-9.0 earthquake and tsunami devastated northeastern Japan, souring the outlook for the world’s third-biggest economy.

“Lower-income earners in particular became budget-minded and reduced expenditures,” an official at the ministry said.

In 2014, spending decreased 8.0 percent on education, 2.2 percent on food, 3.6 percent on entertainment, and 2.5 percent on furniture and other household items.

Average monthly spending by wage-earning families other than self-employed households in 2014 declined 3.1 percent to 280,809 yen, while average monthly income fell 3.2 percent to 468,367 yen.

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