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REPEAT: MNI: BOJ Index Shows Japan Consumption Loses Momentum

MNI (London)
Repeats Story Initially Transmitted at 05:36 GMT Oct 5/01:36 EST Oct 5
     TOKYO (MNI) - Bank of Japan officials are vigilant against the risk that
consumer spending momentum is weakening as its supply-side Consumption Activity
Index posted the second straight month-on-month drop in August.
     The BOJ supply-side Consumption Activity Index fell a real 0.1% on a
seasonally adjusted basis in August for the second straight drop following -0.0%
(revised down from +0.3%) in July.
     The BOJ will not greatly change its assessment that "private consumption
has been increasing moderately, albeit with fluctuations" based on weak July and
August data, as BOJ officials focus on quarter-on-quarter moves to examine the
underlying trends.
     But the BOJ may consider tweaking its assessment at the October 30-31
policy meeting.
     According to the BOJ, the index in the July-August period was down 0.0% on
quarter for the first drop in two quarters after rising 0.6% in the second
quarter.
     The BOJ's consumption indicator reflects a wide range of sales and
supply-side statistics on goods and services and helps capture the short-term
consumption trend. It has a close correlation to final GDP figures.
     --AT ODDS
     The BOJ data isn't consistent with the government data released earlier in
the day. Japan's real average household spending rose 2.8% on year in August,
thanks to higher spending on transportation and communication, as well as on
education. August's 2.8% rise is the highest seen since August 2015, when it
rose 2.9%.
     The ministry upgraded its assessment on household spending for the second
straight month, saying household spending "is picking up." Previously, the
government said, it is "firm and flat."
     The BOJ's Consumption Activity Index is designed to forecast revised
private consumption, not a preliminary estimate.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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