Japan Household Spending Rises

Japan’s household spending rebounded modestly in July as higher bonus payments pushed up real wages, offering policymakers some hope a sustained economic recovery and a tight job market are encouraging consumers to spend, Reuters reported. Household spending rose 0.1% in July from a year earlier, government data showed on Friday, confounding a median market forecast for a 0.9% drop and rebounding after five straight months of declines. The data came as Prime Minister Shinzo Abe, who sought to reflate the economy with heavy monetary and fiscal stimulus measures, kicks off his campaign for another term as head of his ruling party in a leadership vote later this month. A pick-up in consumption and wage growth could help the Bank of Japan make its case that inflation will gradually head toward its ambitious 2% target. But escalating trade frictions cloud the outlook for the export-reliant economy, with reports US President Donald Trump could be contemplating taking on Japan over trade. “Consumption isn’t necessarily strong. Capital spending is underpinning growth but may cool if exports slump,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.