TOKYO (Reuters) – Japan’s household spending likely grew for a sixth consecutive month in May, a Reuters poll found on Friday, offering some hope domestic consumption may offset risks from abroad.
Household spending in May was expected to have risen 1.6% from a year earlier, the poll of 16 economists showed, compared with 1.3% in April.
“Consumer spending and capital expenditure are relatively firm, so domestic demand could help soften damages from external factors,” said Hiroaki Mutou, chief economist at Tokai Tokyo Research Institute.
“The employment situation is stable despite the weak economy and consumer spending has not deteriorated.”
The protracted tariff war between Beijing and Washington poses risks to Japan’s economy as many of its companies in electronic parts and semiconductors ship goods to China to make final products destined for the United States.
If the U.S.-China trade dispute escalates further, it could harm Japanese firms’ sentiment, and thus affect domestic consumption, analysts said.
The Japanese government’s plan to raise the national sales tax to 10% from the current 8% in October could serve an additional blow to consumer spending.
The government will publish household spending data at 8:30 a.m. Japan time on Friday, July 5 (2330 GMT, July 4).
Bank of Japan policymakers had debated the feasibility of ramping up stimulus at their meeting in June, a summary of their opinions released on Friday showed, which could heighten speculation of more monetary support as early as next month.