Japan Household Spending, Output Slump As BOJ Meets
Japan’s household spending suffered the biggest annual fall in nearly a year in December and factory output slumped more than expected, renewing pressure on the central bank to ease policy further to support a fragile economic recovery. The data comes as the Bank of Japan’s two-day rate review continues on Friday, where policymakers will debate whether volatile markets and slowing global growth have heightened risks enough to warrant immediate action. While many central bankers would prefer to stand pat, Friday’s batch of weak data casts doubt on their argument that Japan’s underlying price trend is improving against the background of a solid economic recovery. Household spending fell 4.4 per cent in the year to December, exceeding market forecasts for a 2.4 per cent drop, data by the Internal Affairs Ministry showed on Friday. Separate data showed factory output fell 1.4 per cent in December, declining at the fastest pace in May 2015 and more than a market forecast for a 0.3 per cent drop – a sign weak external demand and sluggish consumption is weighing on manufacturing activity.