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TOKYO (Reuters) – Japanese household spending rose for the first time in five months in year-on-year terms in December and at a much faster-than-expected pace.<\/p>\n
Consumer spending climbed 2.7% in December from a year earlier, data from the internal affairs ministry showed on Friday, better than the median market forecast for a 0.5% uptick. On a seasonally adjusted month-on-month basis, spending increased 2.3%, versus an expected 0.2% fall.<\/p>\n
Consumption and wage trends are key factors the Bank of Japan (BOJ) is watching to gauge economic strength and determine the need for additional rate hikes.<\/p>\n
The BOJ raised interest rates to 0.50% in January, the highest in 17 years, signalling its confidence that rising wages will keep inflation stable around its 2% target.<\/p>\n
December’s pay data released on Wednesday showed inflation-adjusted wages rose 0.6% year-on-year thanks to a winter bonus bump, with government officials expressing optimism that wage hike momentum is growing.<\/p>\n
(Reporting by Satoshi Sugiyama; Editing by Chang-Ran Kim and Sam Holmes)<\/p>\n<\/p><\/div>\n