MNI: 5 THINGS: Japan Jan Household Spending Up, Pickup Seen

--Household Consumption Trend Index Real -0.8% Y/Y

--Total Consumption Trend Index Real +0.9% Y/Y

     TOKYO (MNI) - Japan's real average household spending unexpectedly posted

the first year-on-year rise in two months in January, up 1.9% after adjustment

for a gap caused by using two different survey methods, following -0.1% in

December and +1.7% in November, data released by the Ministry of Internal

Affairs and Communications Friday showed.

     * The January figure came in stronger than the MNI median economist

forecast for a 1.2% drop, which was based on slower retail sales amid the severe

winter weather. The increase was led by home repairs, higher heating bills for

December paid in January, mobile communications and eating out. Domestic and

overseas holiday tours during the long weekend in February were paid in January,

also contributing to high household spending.

     * The ministry maintained its assessment that "consumption has been picking

up." It last revised up its view in June 2017.

     * To see the recent trend, the ministry noted that the three-month moving

average of November-January household spending rose 1.1% from the previous

three-month period, the fourth straight increase after rising 0.6% in

October-December.

     * On the downside, the average real income of households with salaried

workers slumped 3.3% on year in January after adjustment for the statistical

gap, marking the first drop in eight months following the 0.4% gain in December.

Regular incomes earned by household heads fell because the share of the

household heads aged 60 years or older increased to 22.3% of the surveyed

households from 19.7% a year before.

     * The new indexes launched Friday showed mixed results. The Household

Consumption Trend Index, indicating per-household spending patterns, fell a real

0.8% on year in January, while the Total Consumption Trend Index, which is

designed to show similar consumption patterns in the total domestic output, rose

a real 0.9% on year.

     As part of its efforts to present a more accurate reading of final demand,

the ministry is making survey forms for the existing household spending data

easier to fill in by sample households with the introduction of online

book-keeping that covers digital settlements and allows digital reading of

receipts.

     When the ministry smoothes out the statistical gap generated by the change

in the survey method, it will try to show whether a possible upward movement is

from the new digital input or from improvement in the economy. Real average

household spending rose 2.0% on year before adjustment for the gap, only

slightly firmer than the adjusted figure.

     Initially, the ministry is asking half of the sample households to

participate in online submission of their spending patterns and ask the other

half to use the existing paper forms, which are now more user-friendly. The new

digital method may catch expenditures that were left out in the analogue input.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

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

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