Japan's households spend less

Bargains are failing to find buyers

Japanese households spent less in September in spite of falling prices and government attempts to boost consumer spending, official figures show.

The figures, which show declines for both September and the third quarter of the year, are another knock for government strategy to regenerate the economy.

The cabinet is widely expected to cut its overall growth forecast for the economy later this week.

The Bank of Japan has already downgraded its forecast, acknowledging the economy will shrink by between 0.9% and 1.2% in the fiscal year to March 2001.

In doing so, it said consumer prices would likely fall by up to 1.1% in the year to March 2002, giving steeper-than-expected deflation.

In September this year, overall household spending in Japan fell 3.7% in real terms compared to the same month last year, according to official figures.

Measured across the three months from July to September, household spending was down 2.1% in real terms and a seasonally adjusted 0.9% on year-earlier.