TOKYO (MNI) – Japan’s average household spending rose a real 1.7%
in August from a year earlier to Y293,361, as warm weather boosted sales
of air-conditioners and refrigerators as well as beverages while some
consumers rushed to car dealerships before the end of government
subsidies for low-emission vehicles in September, data from the Ministry
of Internal Affairs and Communications showed Friday.

It was the third consecutive year-on-year rise in household
spending in inflation adjusted terms.

The August figure came in slightly higher than the consensus call
for +1.3%. In nominal terms, spending rose only 0.8% y/y.

The August gain followed a 1.1% rise in July, a 0.5% rise in June
and declines of 0.7% in both May and April, and a 4.4% jump in March
(when there were rush purchases of consumer electronics), the latter
being the largest y/y gain since +5.0% in May 2004.

The May 2009 rise (+0.3%) was the first y/y gain in real terms in
16 months.

Real spending rose in six out of the 10 categories in August: home
maintenance and repairs (+17.4%), transportation and communication led
by automobiles (+8.6%), education (+5.7%), furniture and household
utensils including refrigerators and air conditioners (+2.1%), utility
charges (+1.5%) and other consumption expenditures (+0.1).

These gains more than partly offset lower spending on medical care
(-13.0%), clothing and footwear (-1.0%), culture and recreation (-0.7%),
and food (-0.5%).

The government ended its subsidy program for buying
energy-efficient vehicles in mid-September but will continue to waive
taxes or apply lower tax rates for buying and owning low-emission cars
and trucks.

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

The average real income of salaried workers’ households rose 1.8%
in August to Y470,717, posting the first y/y rise in two months
following a 1.0% drop in July. It rose a nominal 0.9% in August.

Real disposable income in the average salaried workers’ household
rose 0.6% in August to Y388,478, marking the first y/y rise in two
months. It fell 0.3% in nominal terms in August.

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

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