Japanese real household spending growth increased to the highest in over two years in December, up 2.3% MoM and 2.7% YoY compared to expectations of a -0.5% MoM drop in spending and an annual rate of just 0.2% YoY.

• Spending on both goods and services saw strong growth, up 1.8% YoY and 4.7% YoY respectively with real goods spending growth at the highest rate in more than two years.
• The increase in spending came with an increase in income as well. Real incomes were up 2.9% YoY (previously 0.7% YoY) and real disposable income was up 3.0% YoY (previously 1.2% YoY).