Tomohiro Ohsumi | Bloomberg | Getty Images
Signage displays sale prices as a customer shops at a Seiyu supermarket in Tokyo, a discount chain owned by Walmart Stores.
Japan’s household spending fell more than expected in November to mark the third straight month of year-on-year declines, government data showed on Friday, adding to growing uncertainties about the country’s fragile economic recovery.
Household spending in November fell 0.6 percent from a year earlier, more than a median market forecast for a 0.1 percent drop and bigger than the previous month’s 0.3 percent decline.
A pick-up in consumption is crucial for the Bank of Japan to achieve its long-elusive 2 percent inflation target. Weak spending has discouraged firms from raising prices for fear of losing cost-sensitive households as customers.
Japan’s economy shrank in 2018’s third quarter and some analysts warn that any rebound in October-December could have been weaker than initially expected, as trade protectionism and slowing global demand hurt business sentiment.
Fears of a global economic slowdown and growing signs the U.S. Federal Reserve will pause its cycle of interest rate hikes have boosted investor demand for safe-haven currencies, leading to an unwelcome rise in the yen that could hurt Japan’s export-reliant economy.