Monday, 6 July 2020

Japan’s household spending fell at the fastest pace on record

The large spending drop will add to growing pressure on policymakers to ramp up moves to restore confidence among businesses and in particular consumers. Household spending slumped 16.2% in May from a year earlier, government data showed on Tuesday, falling at the quickest pace since comparable data became available in 2001.

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 The drop, which was larger than a median market forecast a 12.2% fall, followed an 11.1% decline in April. A spending recovery is expected to be fragile and take time as households remain reluctant to loosen the purse strings even after a nationwide state of emergency was lifted in May. Still, the Bank of Japan is expected to roughly maintain its view the economy will gradually recover later this year, sources familiar with its thinking told Reuters.

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