TOKYO (AFP) – Japan’s household spending dropped nearly four per cent in January from a year earlier, according to government data released yesterday, suggesting demand remains sluggish in the world’s third- largest economy.
The figure released by the internal affairs ministry was largely in line with market expectations, and the fourth straight month of decline since last October after the country’s sales tax hike on October 1, 2019. The January drop was partly attributed to declines in automobile- and telecommunications-related spending and expenditure on leisure activities, according to the data. The latest data come after Japan suffered its worst quarterly GDP contraction in more than five years in the October-December period, with the tax hike and a deadly typhoon taking a toll on the world’s third-largest economy.
The fall came even before the novel coronavirus outbreak in China hit Japan.
Fears about the economic impact of the virus have shaken the global and Japanese financial markets and the Bank of Japan on Monday issued a rare statement assuring investors it would provide support to ease worries over the spread of the coronavirus.