Japan December household spending seen down on rising COVID-19 cases

FILE PHOTO: People walk at a shopping district in Tokyo, Japan

Japanese household spending likely fell in December from a year earlier, a Reuters poll showed on Friday, the first such fall in three months and a worrying sign that a resurgence in coronavirus cases could delay an economic recovery.

The economy has rebounded from a sharp tumble early last year caused by the COVID-19 pandemic, but renewed restrictions to curb the latest outbreak appear to be taking a toll on consumer spending.

Household spending is expected to have fallen 2.4% in December from a year earlier, the poll of 16 economists found, after a 1.1% growth in November.

Compared with the previous month, spending is forecast to have fallen 1.9%, down for a second straight month, the poll found.

Many people have skipped year-end parties in December to prevent the spread of COVID-19 as the number of virus cases had started rising again.

“An expansion of the coronavirus infection hurt the consumer spending, especially, in the service sector,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“There is a high possibility that the consumer spending will worsen sharply in January due to a sharp increase in the virus cases and a renewed state of emergency in some prefectures.”

Japan earlier this month issued a state of emergency in the Tokyo areas and some other prefectures to curb the COVID-19, asking restaurants to close early and people to stay at home.

The government will publish household spending data at 8:30 a.m. on Feb. 5 (2330 GMT, Feb. 4).

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