Japan’s households cut spending again in March as sticky inflation weighed on sentiment and government subsidies capped costs for utilities, although policymakers are looking for historic wage hikes to be a catalyst for a recovery in coming months.
Real outlays decreased 1.2% from a year before, falling for the 13th consecutive month, the ministry of internal affairs reported Friday. The result compared with economists’ forecast of a 2.3% drop.
The year-on-year drop in March shows that households have continued to tighten their budgets as pay increases fail to keep up with rising costs of living. Real wages fell in March for a 24th straight month, a period during which a key gauge of consumer inflation stayed at or above the Bank of Japan’s 2% inflation target nonstop.