The Cabinet Office in Jalan released their Household Spending data where it only reached by 1.1% for the yearly period in February. This figure is below the expectations of a 2.7% increase.
Furthermore, it also slumped quite drastically from a 6.9% increase in January. The house hold of that country is fragile. It can be seen from the monthly data of that sector which decreased by 2.8%.
It was worse than the decline forecasts of 1.5% and continued the worse trend a month before which was 1.5% weaker. It continued the worse trend before which had the 1.2% weakness.
The consumers' sentiment which was still fragile, the slow salary growth, and global inflation pressure are becoming the main factors which weighting on the Japanese consumers' purchasing power right now.
The Limitations are Pressing the Economy Again
Meanwhile, the government is making a restriction again. This decision is pressing the economic activity of that country so that it has an impact on the shopping trend. How is it possible?
Price will be beyond the salary starting from now. That is why; the analysts predict that in the future the trend will be quite slow. Mean while, the spending on services is going to increase.
Based on the prediction, April can be the right time. However, there is a possibility that the higher price will weight on the other consumption sectors. It was said by Takeshi Minami.
He is actually an economist from a well – known institute. As an information, the real salary which was released some days before showed the increase of 1.2% for a yearly period.
The Stagnant Salary may Threat the Japan’s Economic Growth
The data above is relatively stagnant if it is adjusted with the inflation. This condition triggers the concern for BOJ as the policy maker. So far, that institution is just focusing on the inflation.
The against stagnant salary amidst the inflation increase globally is predicted as a threat for the Japan’s economic growth. The USD / JPY pair is moving in a consolidated way. The released some days ago was the prove.
The household spending released didn’t have any big impacts on the Yen currency movement the US Dollar. The USD / JPY pair nowadays is around the level of 122.50 or weakened by 0.22 percent daily.
Technically, Yen has been consolidating and touching the weakest record sincd 2015. Mean while, The Australian dollar rocketed more than 1.2% to a range of 0.7630s against the US dollar in tuesday trading.
RBA Gave a Sign to Increase the Rate
The Australian Central Bank's (RBA) latest hawkish policy announcement is the cause. AUD/USD hit a high record since June 2021 in the Asian session, although a further rally is likely to be weighed down by market expectations of a strong RBA rate hike.
RBA was maintaining it’s steady rate hike in the level of 0.10%. However, it didn’t talk about the patience to wait for the employment market fixing further to raise the interest rate in the future.
Vice versa, RBA gave a sign about it’s readiness to raise the rates for some months in the future. It is especially if the inflation data and employees salary still show the impressive numbers.
The Australia’s Economic Outlook is Now better
The RBA governor, Philip Lowe said that the salary condition this time is still under the hope of the central bank. However ,the jobless level in Australia has been falling to it’s lowest record in 14 years.
There is a possibility that the jobless Rate in Australia will increase. In the other side, the rising. Inflation may continue and the strong commodity prices are able to make the economy is stronger.
In the other words, the economic outlook in Australia is quite better. The financial market predicts that RBA will increase the eyes for 6 times in 2022. That can support the interest rate from 0.10% up to 1.7%.
