FX.co ★ Japan Personal Spending Rises the Most in 3 Months

In March 2024, household spending in Japan experienced a notable increase of 2.1% year-over-year, contrasting with a 0.5% decline observed in the previous month, and surpassing market expectations, which estimated a 0.2% rise. This marks the most significant growth since December, primarily fueled by a recovery in expenditures for furniture and household goods, which rose by 3.3% following an 8.7% drop in February, as well as a substantial increase in education spending, which surged by 24.2% compared to a 1.9% decrease previously. Further increases were noted in expenditures on fuel, light, and water (7.2% up from 7.6%), alongside transport and communication (2.0% up from 4.6%), culture and recreation (5.1% up from 2.6%), other consumption categories (2.6% up from 4.7%), and miscellaneous items (4.1% up from 9.4%). Meanwhile, reductions in spending on food, clothing, and footwear have moderated, with food decreasing by 0.7% compared to a prior decline of 4.5%, clothing and footwear reducing by 3.0% rather than 12.5%, and housing dropping by 2.6% relative to an 8.1% fall. In contrast, spending on medical care saw a faster decline, falling by 8.3% compared to 7.1% previously. On a monthly comparison, personal spending increased by 0.4%, defying predictions of a 0.5% dip, although this was a slowdown from a significant 3.5% surge in February, which was the highest in nearly three years.