JAPAN’S household spending rose 2% in January from a year earlier, according to government data released today, suggesting demand is gradually recovering in the world’s third-largest economy.

Market players were expecting a drop of 0.95% in the figure released by the internal affairs ministry.

However, the data are notoriously volatile, with spending down 0.1% in December and up 1.7% in November.

Japan has notched up eight straight quarters of economic growth – the longest positive run since the 1980s when the Japanese economy was the envy of the world.

But it has struggled to oust fears of deflation, failing to achieve the 2% inflation rate target set by the central bank, which is thought crucial to boosting the economy.

The government and central bank hope to see a “virtuous cycle”, with an export-led recovery having a positive impact on jobs and household income and thereby boosting domestic demand, which accounts for roughly 60% of Japan’s economy. – AFP, March 9, 2018.