— See Separate Table For Details of Individual Forecasts

TOKYO (MNI) – Japanese real average household spending is expected
to have declined 0.6% on year in December, showing the third consecutive
y/y drop, following -0.4% in both October and November, according to the
median forecast of analysts surveyed by Market News International.

The Ministry of Internal Affairs and Communication will release the
data at 0830 JST on Friday, Jan. 28. (2330 GMT Thursday).

Economists said the expected fall in December consumption is due
mainly to plunges in spending on consumer electronics as well as
automobiles.

Many shoppers rushed to retail stores before Dec. 1, when the
government halved the reward points it offers for buying TVs, air
conditioners/heaters and refrigerators that require less power to
operate.

This caused a pullback in sales of consumer electronics in the
following months. Sales of flat-screen TVs, for example, fell 50.8% on
year in December, after posting a 290% surge in November, according to
GfK Marketing Services Japan.

Automobile sales have also slumped since the rush of purchases
during the summer before the government ended its subsidy program for
buying energy-efficient vehicles in early September.

Passenger car sales posted a 31.6% y/y plunge in December, after
-33.5% in November, -28.8% in October, -5.4% in September and +49.0% in
August.

Meanwhile, Akiyoshi Takumori, chief economist at Sumitomo Mitsui
Asset Management, said, “Improvement in employment and income conditions
is a supporting factor (for consumption).”

Akira Maekawa, senior economist at Global Futures and Forex, said,
“It is highly possible for personal consumption to have made a negative
contribution to the Q4 GDP.”

Personal consumption supported Japan’s GDP with a positive
contribution in every quarter from April-June 2009 to July-September
2010.

On a seasonally adjusted basis, consumption in December is expected
to have fallen 0.6% on month, following +1.0% in November and
-0.9% in October.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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