Japanese household spending fell for a ninth consecutive month in August,
underscoring consumer caution despite rising wages. Inflation-adjusted household
spending slid 3.1% YoY in August; seasonally adjusted spending rose 0.1% MoM.
Real wages have increased every month this year but have yet to lift
consumption. The divergence complicates BOJ communication: Governor UEDA has
flagged upside inflation risks and many market participants expect another rate
hike before year-end. Friday’s data show inflation and domestic demand are not
moving in tandem, and a too-fast or too-large tightening could weigh on the
economy.
