REPEAT: MNI 5 THINGS: Japan Apr Spending Down, Govt Cuts View

--Japan Apr Household Spending -1.3% Y/Y;MNI Median +0.9%

--Japan Apr Household Spending Posts 3rd Straight Y/Y Drop

--Japan Apr S/A Household Spending -1.6% M/M; Mar -0.1%

--Japan Apr S/A Household Spending Posts 3rd Straight M/M Drop

--Japan Apr Per-Household Spending Trend -0.8% Y/Y; Mar -1.6%

--Japan Apr Total Household Spending Trend +0.4% Y/Y; Mar +0.4%

     TOKYO (MNI) - Japan's real average spending by households with two or more

people posted the third straight year-on-year drop in April, down 1.3%, as

expenditures on gift money and domestic packaged tours continued to decline,

data released Tuesday by the Ministry of Internal Affairs and Communications

showed.

     Japan's economy appears to have a slow start to the April-June quarter,

judging from industrial production and household spending, after it posted the

first contraction in about two years in the first quarter as the severe winter

weather dampened consumption. Economists expect a GDP rebound in Q2.

     The ministry downgraded its assessment on household spending for the first

time in two months, saying "weakness is seen in consumption." Last month, it

said the pickup was stalling. The pickup continued for nearly a year since May

2017.

     "We downgraded our view because spending fell in both nominal and real

terms," a ministry official said.

     Household spending fell a nominal 0.5% in April, the first year-on-year

fall in 12 months after rising 0.6% in March.

     The key points from the monthly Family Income and Expenditure Survey on

Households.

     * Real average household spending fell 1.3% on year in April after

adjustment for the gap caused by using two different survey methods, the third

straight drop after -0.7% in March. It came in much weaker than the MNI median

economist forecast for a 0.9% rise.

     * The decrease was caused by the recent social and demographic changes. In

light of slow real wage growth and lower public pension payouts, spending on

gift money has been reduced. Many consumers are also booking their own hotels

and transportation, bypassing travel agencies. In April, spending on packaged

tours fell 10.1% on year while that on accommodations rose 17.3%

     * Some gains in April were not high enough to push up overall expenditures.

Payments of university entrance fees rose as they were more concentrated in

April this year. Monthly payments of mobile communications also rose because

some carriers charged March bills in April as March 31 fell on a Saturday.

     * Average real spending also posted the third straight month-on-month drop

in April on a seasonally adjusted basis. The pace of decrease accelerated to

-1.6% from -0.1% in March.

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

volatile items (close to private consumption patterns in GDP data) fell a

seasonally adjusted 0.7% on month in April, the third straight m/m drop after

-1.2% in March.

     * The average real income of households with salaried workers fell 0.2% on

year in April after adjustment for the statistical gap, marking the fourth

straight y/y drop after -3.8% in March. Overtime working hours have been falling

as firms and employees are seeking a better work-life balance. Non-regular jobs

for people aged 60 years or older are also increasing, reducing the

per-household income.

     * The Household Consumption Trend Index, indicating per-household spending

patterns, fell a real 0.8% on year in April vs. -1.6% in March, while the Total

Consumption Trend Index, which is designed to show similar consumption patterns

in the total domestic output, rose a real 0.4% on year vs. +0.4% in the previous

month.

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