Signs of a turnround in Japan’s economy seem to be piling up, as consumer spending shrank in October but at a less severe pace than was forecast.

This follows price data last week suggesting Japan may be shaking off deflation.

Overall household spending shrank 0.4 per cent year-on-year in October, a better result than the 2.1 per cent contraction in September, and also ahead of forecasts for a 1 per cent drop.

It was the smallest contraction in spending since April, which also saw a 0.4 per cent decline at the time.

The resilience of the consumer has been held up by the Bank of Japan as one of the strong points of the domestic economy, despite data showing spending has been in decline for most of this year.

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