MNI BRIEF: BOJ Consumption Activity Index Flat M/M In May
The Bank of Japan's Consumption Activity Index was unchanged in May following a 1.0% rise from March to April.
Services associated spending remained firm, but spending on non-durable goods fell as higher prices continued to squeeze consumers’ purchasing power.
Bank officials admitted that private consumption lacked strength as households faced high prices amid weak real wages, which fell y/y in April for the 25th straight month.
Real household spending fell 1.8% m/m in May, the first decline in two months following 0.5% in April, government data showed. Private consumption fell 0.7% q/q in Q1, the fourth straight quarterly drop, according to latest GDP data.
Sluggish private consumption is concerning officials who are considering raising the policy interest rate as early as July’s meeting.