TOKYO (Reuters) – Japanese household spending probably accelerated its pace of declines in March, a Reuters poll showed on Thursday, underscoring the difficulties facing policymakers keen to engineer self-sustaining economic growth and normalise monetary policy.
March household spending could fall 2.4% from the same month a year earlier, compared with the prior month’s 0.5% decline, according to the poll of 16 economists.
That would mark a 13th straight month of year-on-year declines and its biggest drop since January when it fell 6.3%.
“Consumption of items such as clothing and service-related spending likely weakened due to cooler weather in early March,” SMBC Nikko Securities’ analysts said in the poll.
“We expect real consumption to fall 1.8% in the first quarter, swinging from a 0.7% increase in the final three months of 2023,” they added, noting that a scandal at Toyota’s compact car unit Daihatsu that led to the suspension of output and shipments likely suppressed spending on cars.
On the month, household spending is expected to slip 0.3% in March which compares with a 1.4% rise for February.
The data from the Internal Affairs and Communications Ministry is due out at 8:30 a.m. May 10 (2330 GMT May 9).
Weak household consumption is a source of concern among Japanese policymakers who want to see a virtuous cyle of economic growth led by strong wage hikes and solid consumer spending.
The Bank of Japan in March ended negative interest rates and yield curb control altogether in a landmark shift away from its unconventional ultra-easy policy, though it has said it will keep accommodative conditions for the time being given the fragile economy.
Separately, current account data is expected to show a surplus of 3.49 trillion yen ($22.4 billion) in March, versus February’s 2.64 trillion yen surplus. Those figures from the Ministry of Finance are due on May 10 at 8:50 a.m. (May 9, 2350 GMT).
($1 = 156.0400 yen)
(Reporting by Tetsushi Kajimoto; Editing by Edwina Gibbs)
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