TOKYO (Reuters) -Japanese household spending in May rose 4.7% from a year earlier, internal affairs ministry data showed on Friday, better than the median market forecast for a 1.2% rise.
On a seasonally adjusted, month-on-month basis, spending increased 4.6%, versus an estimated 0.4% uptick.
Consumption and wage trends are among key factors the Bank of Japan is watching to gauge economic strength and decide how soon to raise interest rates.
Hefty pay hikes have been seen as essential to counter inflation-induced sharp increases in the cost of living.
Japanese companies agreed to raise wages by 5.25% this year, marking the biggest pay hike in 34 years, the country’s largest labour union group Rengo said on Thursday.
However, Japanese policymakers and analysts are concerned global trade tensions triggered by U.S. President Donald Trump’s tariff policies may dent the pay-hike momentum and complicate BOJ’s efforts to normalise monetary policy.
(Reporting by Satoshi Sugiyama; Editing by Jacqueline Wong and Himani Sarkar)
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