Japan household spending falls as consumers wary of virus
FILE PHOTO: A staff wearing a face shield sells fish at Japan's supermarket group Aeon's shopping mall as the mall reopens amid the coronavirus disease (COVID-19) outbreak in Chiba, Japan May 28, 2020. REUTERS/Kim Kyung-Hoon
TOKYO : Japan's household spending fell in September as consumers remained cautious about COVID-19, reinforcing views the world's third-largest economy contracted in the third quarter.
The data underscored the need for policymakers to shore up domestic consumption as the global supply crunch hits the export-reliant economy.
Spending fell 1.9per cent year-on-year in September, after a 3.0per cent decrease in August, government data showed on Friday. It was a better reading than a median market forecast for a 3.9per cent slip in a Reuters poll.
In seasonally adjusted month-on-month terms, spending jumped 5.0per cent in September, marking the first increase in five months, beating expectations for 2.8per cent growth.
Many economists expect a contraction in Japan's third-quarter output, due in part to disappointing industrial output figures, which kept falling on car production cuts.
Beyond carmakers, supply shortages in semiconductors and other components produced in coronavirus-hit Southeast Asia have caused a ripple effect in other parts of the Japanese economy. Growth in exports has slowed while private consumption stagnated because of car sales slumps.
The government is due to release a preliminary gross domestic product estimate for July-September on Nov. 15.
To prop up Japan's relatively tepid economic recovery, Prime Minister Fumio Kishida pledged earlier this week to compile a "large-scale" stimulus package in mid-November.
(Reporting by Kantaro Komiya; Editing by Sam Holmes and Richard Pullin)
