Household Spending Fell in Jan, Current Account Surplus Stronger Than Expected

Earlier, household spending data for Jan was weaker than expected, printing at -6.3% y/y, versus -4.1% forecast and prior of -2.5%. This is a measure real household spending and it is now back to early 2021 lows.

• Consumption is a key focus point for the authorities and the BoJ outlook. Firmer wages growth is seen as critical to driving firmer spending trends as we progress through 2024. Given anecdotes around wage negotiations are firmer for this year compared with last year, today's weaker household spending print may not impact BoJ thinking.
• Food spending was down 2.7% y/y, while transport spending, -13.1%y/y was also a weak point. These trends do tend to be volatile though.
• Other data showed the current account stronger than expected for Jan. It printed ¥438.2bn, versus the -¥330.4bn forecast. In adjusted terms were ¥2727.5bn, against a ¥2074.4bn forecast. The adjusted trend is just sub 2023 highs. Primary income surged to nearly ¥3600bn. The trade deficit (in seasonally adjusted terms) was -¥328.7bn, slightly improved on the Dec reading.
• Exports and imports both fell in Jan versus Dec levels.