Back to Markets
Forex▲ Bullish
Japan May Data: Strong Spending, Soft Wages Keep BOJ in Wait Mode
Household spending rose 3.7% m/m, far above expectations, while wage growth slowed to 3.2%. The mixed signals leave the BOJ's July rate decision hanging on next week's Tokyo CPI.
Continue with
Japan's household spending jumped 3.7% in May from April, far exceeding the 1.4% gain economists had forecast, the Ministry of Internal Affairs reported Tuesday. Wage growth, however, slipped below expectations. The mixed picture gives the Bank of Japan conflicting signals as it approaches its July 20-21 policy meeting.
On an annual basis, spending fell 0.3%, a smaller drop than the 2.5% decline analysts had expected. The prior month's monthly reading was revised up to 1.6%. The spending beat suggests the recovery in domestic demand is gaining traction after a weak first quarter.
Average cash earnings rose 3.2% from a year earlier, undershooting the 3.4% consensus estimate and down from 3.5% in April. The same-sample base measure, a cleaner gauge tracked by the BOJ, held at 2.9% for a second consecutive month. Overtime pay growth slowed to 2.9% from 4.2% in the prior month. The spring wage negotiations delivered the largest base-pay increases in decades, traders said. Those gains have been slow to filter into the monthly cash earnings series.