Japan's households opened their wallets a bit wider than expected in May, with household expenditures jumping for the first time in more than a year.
Household expenditures rose 4.8 percent on year in May, topping a Reuters poll forecast for 3.4 percent and marking the first on-year increase since the country increased its consumption tax in April of 2014.
Some took the jump as a clear positive.
"Most people were extremely skeptical on the whole Japanese package. 90 percent of outside observers said there was no way a country in a state of decline for 20 years could turn itself around," Mark Matthews, head of research for Asia at Julius Baer, said in a phone interview. "These good numbers show there's some momentum in the economy."
Japan's policymakers have struggled to kick start the economy after decades of deflation, with the Bank of Japan launching a massive easing program in 2013 as part of "Abenomics," Japanese Prime Minister Shinzo Abe's plan to return the country to growth.
But after a consumption tax hike to 8 percent from 5 percent in April of 2014, the economy got clobbered when consumers stopped spending, forcing the government to postpone a second sales tax initially due this October.
Other data released at the same time as the household expenditures were more muted. Japan's core consumer price index (CPI) rose 0.1 percent on-year in May, just a tad above a Reuters poll forecast for a flat reading and down from a 0.3 percent rise in April. The unemployment rate was steady at 3.3 percent in May, as expected.