TOKYO: Japan’s household spending soared in April, official figures showed on Friday, although the gains were mostly driven by base effects from last year’s sharp fall due to the initial impact of the coronavirus pandemic.
An extension of state of emergency restrictions in Tokyo and other major areas is hurting the outlook for Japan’s economy, which already fell back into contraction in the first quarter due to weak consumer and business spending, report agencies.
Household spending rose 13 per cent year-on-year in April, after a 6.2 per cent rise in March, government data showed, and was stronger than a median market forecast for a 9.3 per cent gain in a Reuters poll.
The jump was largely a rebound from a sharp contraction in April last year, when household spending slumped 11.1 per cent year-on-year.
It marked the steepest year-on-year rise since comparable monthly data became available in January 2001, a government official said.
The month-on-month figures posted a small, 0.1 per cent rise compared with a forecast of a 2.2 per cent decline.
While the rise was larger-than-expected, it was unlikely to dispel worries that Japan will lag recoveries seen in other major economies, with data on Thursday showing activity in the services sector shrank at a faster pace in May due to the impact from the emergency curbs.
Some analysts are worried the world’s third-largest economy may slide back into recession in the current quarter, defined as two straight quarters of contraction, as weakness in consumer sentiment persists longer than originally thought.