Japan Household Spending: Updated March 12

 Article Source: https://mainichi.jp/english/articles/20220208/p2g/00m/0bu/023000c

Article:

TOKYO (Kyodo) -- Japan's average monthly household spending in 2021 rose a real 0.7 percent from the previous year, marking the first increase in two years, as more people went out amid a decline in novel coronavirus cases, the government said Tuesday.

Average spending by households of two or more people stood at 279,024 yen ($2,420), according to the Ministry of Internal Affairs and Communications.

Daily new COVID-19 cases in the country fell significantly after the summer and a coronavirus state of emergency was completely lifted in October.

"When the coronavirus situation subsided somewhat, more people went out, resulting in increased use of transportation such as trains," a ministry official said.

By category, spending on transportation and communications rose a real 4.7 percent from the previous year, while outlays on education climbed 15.7 percent, according to the data.

On the other hand, spending on food fell 1.0 percent from a year earlier due to restrictions on eateries amid the pandemic.

In December alone, average household spending stood at 317,206 yen, down a real 0.2 percent from a year earlier and declining for the fifth consecutive month.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

Ideas:

Household or consumer spending is always a major challenge for the Bank of Japan, for many reasons.

Japanease consumers aren't, for the most part, big spenders like those in the US. Consumer spending in the US economy makes up about 60-70 percent of GDP, while in Japan its only about 50 percent of GDP.

Another obvioius reason is Japan is now considered an ageing society, and again for the most part, those in their upper years tend to spend less than those in younger years.

But a recent report has suggested that those in the 20 to 65 age groups in Japan spend as much or more as their peers in other OECD countries.

But as Japan is ageing rapidly it might be consumer spending is always going to be a challenge for the Bank of Japan and its ability to reach the 2 percent goal related to inflation or more correctly consumer inflation and not producer inflation.

And as more people were out and about it related to spending in many different areas such as transportation, restaurants, retail shops and so on. So there was a synergy effect that has once place saw improvement,other related places also saw improvements.

But then again there has been the continued increase in prices in both supermarket food, gasoine prices, and home energy prices which might have put a dent on consumer spending as houesholds/consumer has less disposable income to use on extras or even some basic such food as supermarkets.

Which means some might have decided to find subsitutes for what they usually buy as maybe the prices were beginning to get too high for the especially the fixed income goups.

Now as the omicrno situation has hit and some provinces, including Tokyo are back into some kind of emergency measures, consumer spending again might drop again, or slow down some.

However, some consumers might feel the omicron situation is not that big deal and just think of it as just like the flu, and just go about their business, but still wearing masks to remain safe.

Have a nice day and be safe