Household consumption fell 3.3% year on year in June, 4.3 percentage points below the market forecast of +1%. This has fueled growing skepticism over the BOJ’s normalization of interest-rate increases.
Household consumption fell 3.3% year on year in June. News reports described the decline as a significant undershoot of forecasts.
Against a backdrop of weak demand, views on the BOJ’s monetary policy normalization have shifted, and attention is focused on future policy developments and the market response.
Market expectations are increasingly linking the developments to a weaker yen, higher share prices and stronger Japanese government bonds.