Household Spending Surges in Australia and Japan

Household spending in Australia and Japan rose significantly in May, with Australia seeing a 0.9% increase after a stagnant April, driven by discretionary purchases such as clothing, footwear, dining, and new vehicles. This boosted consumer demand may affect the Reserve Bank of Australia's interest rate decisions. In Japan, household spending climbed 4.7% year-on-year, the fastest pace since August 2022, spurred by a rebound in automobile purchases and dining out, attributed in part to recovery from earlier production disruptions and government measures. Analysts express optimism about Japan's consumption outlook but note ongoing global trade risks. Wage increases in Japan are expected to further support consumption as inflation slows and real incomes improve later in the year. These trends highlight the influence of policy and external factors on consumer behavior in both countries.