Japan household spending falls, casts doubts on BOJ optimism

Japan's household spending unexpectedly fell in May as an increase in sales tax continued to hurt consumption, raising doubts about the Bank of Japan's optimistic economic outlook. Other data showed Japan's core consumer inflation eased slightly in May when excluding the effect of a sales tax hike. It is seen slowing in coming months as the boost from a weak yen fades, but the moves in consumer prices are in line with BOJ forecasts. The jobless rate fell to its lowest in more than a decade, while a measure of labour demand hit the highest in two decades, although it may take time for the strong labour market to lift consumer spending after the tax hike.

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