Sun, Jun 29, 2014 - Page 13 News List

Japanese wives loosen purse strings of family finances

Bloomberg

Japanese women are giving their husbands a reprieve, allowing them larger monthly allowances to offset a sales-tax rise at the start of the financial year.

Spending money, often set by wives who control family budgets, rose 2.9 percent to ¥39,572 (US$389) from last year, according to Shinsei Bank Ltd., a Tokyo-based lender whose data go back to 1979. Salarymen spent more on drinking sessions, spending ¥3,483 an average of 2.4 times a month.

While Thursday’s report suggests family budgets may be withstanding April’s 3 percent tax increase, allowances remain at about half the level in 1989 at the height of the asset bubble. Japanese Prime Minister Shinzo Abe declared the end of deflation in an interview this week and he now needs firms to dig into record cash piles and boost wages that lag behind inflation.

“The message is that it’s okay to raise allowances, but only by the amount of the sales-tax rise... it’s clear that real income is falling,” a senior economist at Mitsubishi UFJ Research and Consulting Co Shinichiro Kobayashi said.

Allowances for men in their 20s fell 1.6 percent, while those for men aged 30-59 rose. Women had ¥36,712 to spend, ¥2,860 less than their male counterparts. The survey of 2,378 people was conducted online over three days from April 23. The poll included 1,048 male and 536 female full-time company workers, with the rest part-time workers of both sexes.

Men’s lunch money rose ¥23 to ¥541, roughly equivalent to Japan’s largest denomination coin plus the 8 percent sales tax.

As the Bank of Japan (BOJ) conducts unprecedented easing as it targets 2 percent inflation, restaurants near the bank’s central Tokyo building are offering “one-coin” ¥500 lunches.

“The number of lunches costing ¥500 is growing in this area,” said Lu Jianbo, 26, an owner of a Chinese restaurant on “BOJ Street.”

Base wages, excluding overtime and bonus payments, fell in April for a 23rd straight month, while average overall pay for Japanese workers was ¥274,241, according to labor ministry data.

The BOJ’s stimulus has spurred inflation. In data due today, overall consumer prices are forecast to have risen 3.7 percent last month, according to the median projection of 21 economists.

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