By Max Sato
(MaceNews) – Here are the key Japanese economic events later this week.
There is optimism in financial markets that the global trade war may be resolved through negotiations, but protectionist U.S. trade policy remains unpredictable and geopolitical risks have been heightened. Japanese automakers have lowered prices for their U.S. customers to cover higher import costs but exporters have been sluggish, weighing downward pressure on industrial production.
– Friday, July 4
0830 JST (1930 EDT/1630 PDT Thursday, June 5) The Ministry of Internal Affairs and Communications releases May household spending.
Mace News median forecasts: +1.1% y/y (range -0.3% to +3.1%) vs. Apr -0.1%; +0.3% m/m (range: -0.4% to +0.6%) vs. Apr -1.8%
Japan’s real household spending is forecast to have picked up slightly to a modest 1.1% gain on the year in May after being nearly flat (-0.1%) in April and posting an unexpected gain (+2.8%) in March, with a few economists projecting a slight dip. The eighth y/y decline in 12 months in April was caused by consumer preference to simplified lower-cost funerals and by lower spending on non-core factors such as gift money and funds sent to children studying away from home.
Above-3% inflation is eroding the purchasing power, keeping many households cautious about spending beyond necessities, while spending on foodstuffs (including eating out) is showing a gradual recovery after a recent spike in fresh vegetable prices caused by last year’s bad weather has waned. Nominal wages have been above year-earlier levels for more than three years, up 2.0% in April, but real wages posted a fourth straight drop, down 2.0%.
On the month, real average expenditures by households with two or more people are expected to rise a seasonally adjusted 0.3% after plunging 1.8% in April and rising 0.4% in March.