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 (NYSE:)’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)