Asia

Friday, December 6, 2019 - 02:55

MNI DATA IMPAT: BOJ Oct Consumption Index Drops Sharply


TOKYO (MNI) - The Bank of Japan's Consumption Activity Index posted the first month-on-month drop in three months, down 7.4% on a seasonally adjusted basis in October, data released Friday showed.

The fall came after upwardly revised gain of 3.8% in September and a downwardly revised rise of 2.5% in August.

Private consumption was hit hard by a post-tax hike drop and a string of natural disasters in October that slowed demand.

The October index fell 4.3% on quarter, reversing the 0.8% gain in the Q3 and +0.7% in Q2.

The BOJ will likely lower its assessment of private consumption at its two-day policy-setting meeting on Dec. 18-19 in the wake of the weak index in addition to other weak spending data.

The latest assessment was "private consumption has been increasing moderately, albeit with fluctuations, against the background of steady improvement in the employment and income situation."

However, its unlikely the BOJ will change its view of the underlying economy trend, as bank officials are focused on how private consumption evolves in Q1.

The BOJ's Consumption Activity Index looks to forecast revised private consumption and is 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

[TOPICS: MAJDS$,M$A$$$,M$J$$$]

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