Japan June Household Spending Up on Dry Weather, Auto Demand

--June Household Spending +2.3% Y/Y, 1st Rise in 16 Months

--Core Spending Ex-Volatile Items Marks 1st M/M Rise in 2 Months

     TOKYO (MNI) - Japan's Family Income and Expenditure Survey of Households

with Two or More People released by the Ministry of Internal Affairs and

Communications Friday:

     * Real average household spending posted the first year-on-year rise in 16

months, up 2.3% in June, reflecting a gradual pickup in consumer sentiment and

modest household income gains. The highest rise since August 2015, when spending

rose 2.9%, was largely due to unusually dry weather during this year's rainy

season, which led to a sharp increase in home renovation work compared to a year

earlier.

     * At the same time, spending on automobiles continued to show a

year-on-year rise as the effect of the introduction of new models lingered and

the drag from the fabricated gas mileage data scandal for mini vehicles faded.

Spending on mobile communications also rose in line with the spread of

smartphones to more households. Expenditures on seafood products fell due to a

poor catch and those on beer dropped in light of price rises.

     * The increase came in stronger than the MNI median economist forecast for

+0.5%. In previous months, the pace of decrease in the y/y rate had decelerated

sharply to -0.1% in May from -1.4% in April and the recent bottom of -3.8% in

February.

     * The core spending index, which excludes housing, motor vehicles and other

volatile items (close to private consumption patterns in GDP data) rose 0.8% on

month in June on a seasonally adjusted basis, the first month-on-month gain in

two months after -1.1% in May and +3.5% in April.

     * Average real income of households with salaried workers rose 0.1% on year

in June, the first year-on-year rise in four months, vs. -1.7% in May.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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