MNI DATA IMPACT: BOJ Consumption Index Has 1st Drop In 5 Mths

The Bank of Japan's Consumption Activity Index fell 0.6% m/m in December, the first sequential drop in five months, data released by the BOJ Friday showed, confirming the slowdown in private consumption that bank officials expected after the earlier boost from pent-up demand and the government's Go To Travel subsidies.

The index stood at a revised +0.8% in November.

The data was consistent with the BOJ's assessment that "private consumption has picked up gradually as a trend, but downward pressure has increased recently in consumption of services, such as eating and drinking as well as accommodations."

IMPACT OF EMERGENCY

Bank officials are worried about weaker private consumption in or after January as the government has extended a coronavirus-related state of emergency to March 7 and temporarily suspended the Go To travel campaign.

Japan's real average household spending fell 0.6% on year in December for the first drop in three months following +1.1% in November, government data showed.