— Real Household Spending Posts First Y/Y Rise in 2 Months>}

TOKYO (MNI) – Japan’s average household spending rose a real 4.4%
from a year earlier to Y319,991 in March, on increases in purchases of
cars, TVs and personal computers as well as higher costs of home
maintenance and holiday hours, data from the Ministry of Internal
Affairs and Communications showed Friday.

It was the first year-on-year rise in two months in inflation
adjusted terms and the March figure came in much stronger than the
consensus call of +0.6%.

The rise in March followed a fall of 0.5% in February and gains of
1.7% in January, 2.1% in December and 2.2% in November. The May 2009
rise (+0.3%) was the first y/y gain in real terms in 16 months.

Real spending rose in seven out of the 10 categories in March:
housing (+18.5% y/y), furniture and household utensils (+16.1%),
transportation and communication (+13.2%), culture and recreation
(+12.1%), education (+10.3%), utility charges (+1.5%) and food (+0.4%).

These gains offset lower spending on medical care (-6.4%), other
consumption expenditures (-1.4%) and clothing and footwear (-1.1%).

Tax breaks for buying low-emission vehicles have supported demand
for automobiles. In March the transportation and communication category
posted the first y/y rise in two months.

Education marked the first y/y rise in three months in March.

The government’s reward program for buying greener consumer
electronics has continued to prop up demand for certain models of TVs,
refrigerators and air conditioners/heaters.

Solid demand for TVs and personal computers was seen for the ninth
straight y/y rise.

Demand for home durable goods, such as air conditioners, was
reflected in spending on “furniture and household utensils,” which
showed the sixth consecutive y/y rise.

The average real income of salaried workers’ households rose 0.4%
y/y in March to Y439,410 following a rise of 1.3% in February and drops
of 0.5% in January and 4.8% in December.

It posted the fifth year-on-year rise in the past 12 months in
inflation adjusted terms but fell 0.9% in nominal terms in March after
being flat in February.

Real disposable income in the average salaried workers’ household
rose 0.3% in March to Y362,466 after a 1.5% rise in February, showing
the fourth y/y rise in the past 12 months in real terms. It fell 1.0% in
nominal terms in March.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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