TOKYO (Reuters) -Japanese household spending fell in November, government data showed on Friday, weighed down by stubbornly high prices that dissuaded consumers from loosening their purse strings.
Consumer spending dropped 0.4% in November from a year earlier, data from the internal affairs ministry showed, slightly better than the median market forecast for a 0.6% decline. On a seasonally adjusted, month-on-month basis, however, spending increased 0.4%, versus an expected 0.9% fall.
Consumers cut back spending on food, clothing and entertainment, while expenditure in education and housing went up, the data showed.
Consumption and wage trends are among key factors the Bank of Japan (BOJ) is watching to gauge the strength of Japan’s economy and decide how soon to raise interest rates.
November’s pay data released on Thursday showed inflation-adjusted wages slid for the fourth straight month in November, dragged by higher prices even though base pay grew at the fastest pace in three decades.
The BOJ ended massive monetary stimulus and raised interest rates to 0.25% last year. While some investors are betting the next rate hike will take place at a Jan. 23-24 meeting, others see a stronger chance in March.
(Reporting by Satoshi Sugiyama; Editing by Leslie Adler and Sonali Paul)
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