Japan household spending falls in March as virus-driven disruptions press

Japan’s household spending declined by 6.0% in March from a year earlier, according to the government data released on Friday, highlighting the deepening impact of the pandemic on the world’s third-biggest economy.

The frail reading is expected to prompt policymakers in providing larger volumes of fiscal stimulus to salvage an economy in the brink of sharp contraction. Monetary supports are necessary as the pandemic halted business operations and forced consumers to stay at home.

The recorded downturn in household spending fell behind the initial market forecast of 6.7%, with a 0.3% decline in February. More so, it will affect the preliminary first-quarter gross domestic product (GDP) data to be released on May 18.

The economy is expected to contract by an annualized 4.5% in the first quarter, ahead of a 22% drop in May-June, according to a Reuters survey released last week.