REPEAT: MNI 5 THINGS: Japan June Spending +2.9% M/M; -1.2% Y/Y

Repeats Story Initially Transmitted at 05:34 GMT Aug 7/01:34 EST Aug 7

--Japan June Household Spending -1.2% Y/Y;MNI Median -1.5% 

--Japan June Household Spending Posts 5th Straight Y/Y Drop 

--Japan June S/A Household Spending +2.9% M/M; May -0.2% 

--Japan June S/A Household Spending Posts 1st M/M Rise in 5 Months

     TOKYO (MNI) - Japan's real average household spending rebounded sharply on

month in June, leading to a smaller year-on-year drop and supporting forecasts

that GDP posted a modest gain in April-June after a slump in Q1, data released

Tuesday by the Ministry of Internal Affairs and Communications showed.

     In data due Friday, the gross domestic product for the April-June quarter

is expected show a modest 0.2% rise on quarter, or an annualized 1.0%,

rebounding from a Q1 contraction amid the severe winter weather, thanks to solid

consumption and business investment.

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

Households.

     * Japan's real average spending by households with two or more people

posted the fifth straight year-on-year drop in June, down 1.2%, after adjustment

for the gap caused by using two different survey methods, coming in firmer than

the MNI median economist forecast for a 1.5% fall. Higher spending on cars and

air conditioners failed to make up for a sharp drop in expenditures on package

tours. The recent trend is that more people are bypassing travel agencies for

domestic leisure and unit costs for overseas tours have dropped as people are

choosing closer and cheaper holiday destinations in Asia.

     * However, the pace of y/y decrease decelerated from -3.9% in May as

spending posted a sharp 2.9% month-on-month rise in June after -0,.2% in May and

-1.6% in April. For the April-June quarter, it fell 2.2% on quarter for the

first drop in two quarters vs. +0.1% in Q1. Sharp fluctuations are expected to

last for a while due to the recent adjustment to the statistical gap.

     * The ministry left its assessment on household spending, saying "weakness

is seen in consumption." The ministry last downgraded its view for the April

data.

     * The average real income of households with salaried workers jumped 4.4%

on year in June, marking the first rise in six months after -0.3% in May thanks

to summer bonuses, but households remain generally cautious about spending.

     * The average real income of households for the second quarter rose 1.8% on

quarter for the first rise in two quarters following -3.1% for the first

quarter.

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