MNI BRIEF: Consumption Index Supports BOJ View

The Bank of Japan's Consumption Activity Index posted its first rise in three months, up 0.6% in February following January's 0.1% fall, supporting the BOJ’s view that private consumption has been resilient.

The data is consistent with government’s real household spending index, which rose 1.4% m/m in February, the first rise in five months following -2.1% in January.

However, consumer spending, mainly automobile sales, fell in March due to the temporary suspension of car production.

The average index for the January-February period fell 0.6% q/q from the previous quarter, the second straight drop. The BOJ's Consumption Activity Index is designed to forecast revised private consumption, not act as a preliminary estimate.

MNI reported this week the BOJ would consider raising its policy rate from zero to 0.1% should services prices data due on April 26 indicate significant upside risks to prices. (See MNI POLICY: April Services Data Key For Further BOJ Rate Move)