Japan household spending unexpectedly fell for a seventh consecutive month in June, underscoring persistent inflationary pressure on consumption despite rising inflation-adjusted wages, the Ministry of Internal Affairs and Communications said. Real household spending dropped 3.3% YoY in June versus an economists’ consensus of +0.9%; seasonally adjusted spending fell 6.4% MoM. The decline clouds prospects for a domestic-demand-led recovery even as state aid has lowered utility costs and inflation

Japan household spending unexpectedly fell for a seventh consecutive month in June, underscoring persistent inflationary pressure on consumption despite rising inflation-adjusted wages, the Ministry of Internal Affairs and Communications said. Real household spending dropped 3.3% YoY in June versus an economists’ consensus of +0.9%; seasonally adjusted spending fell 6.4% MoM. The decline clouds prospects for a domestic-demand-led recovery even as state aid has lowered utility costs and inflation-adjusted wages have risen month-to-month this year. Consumer confidence improved in June but remains well below its 10- and 20-year averages. The government will publish preliminary Q2 GDP on Aug. 17.