The Ministry of Internal Affairs and Communications reported that the Japanese household spending surged 2.3 percent y-o-y in June, exceeding economists' forecast for a 0.6 percent y-o-y gain. That was the first y-o-y rise in 16 months and the highest increase since August 2015. In previous months, retail sales posted a 0.1 percent y-o-y drop, which marked a sharp deceleration from -1.4 percent in April and the recent bottom of -3.8 percent in February. The surge in household spending was largely due to unusually dry weather during this year's rainy season, which provoked an increase in home renovation works compared to a year earlier. Another contributor to the growth was higher spending on automobiles.