Japan's households boosted spending for a second consecutive month in October, despite accelerating inflation and falling real wages, marking a better than expected start to the final quarter of the year.
The internal affairs ministry reported on Tuesday that outlays increased by 1.1% from September, led by gains in clothing and entertainment. Spending went up 1.2% from a year ago, more than the increase predicted by analysts.
The country s recovery path is supported by the release of pent-up demand, even as inflation eats into households purchasing power, according to the solid spending data. Economists predict that Japan's economy will return to growth this quarter, pushed up by private sector investment and consumption. The yen's historic slide battered firms and households in the three months ended September of the economy unexpectedly shrank.
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