TOKYO (Reuters) -- Japan's household spending rose for a seventh consecutive month in June, suggesting resilient consumer spending could help counter the effects of weak global demand, but falls in real wages cloud the outlook for overall domestic consumption.
The Bank of Japan is hopeful that a pick-up in private consumption will help it to achieve its 2 percent inflation target even as an intensifying U.S.-China trade war and tensions with South Korea hurt exports and business sentiment.
Household spending in June rose 2.7% from a year earlier, nearly double the median forecast for a 1.4% gain, government data showed on Tuesday.
In May, spending rose at the fastest pace in four years, in a sign improving domestic demand will offer some support for an economy facing growing external pressure.
From the previous month, household spending declined 2.8% in June, which compared with a median estimate for a 3.0% drop.
There were some areas of concern about the outlook. Separate data showed real wages in Japan adjusted for inflation slipped for a sixth straight month in June, which could undermine domestic consumption ahead of a planned sales tax hike in October.
Japan plans to increase the sales tax to 10% this October, unless there is an economic shock on the scale of the collapse of Lehman Brothers, officials say.
Some policymakers worry the tax hike will further damage consumer sentiment and hurt an economy already under pressure from the U.S.-China trade war and slowing global demand.
The Bank of Japan last week held off expanding stimulus but committed to doing so "without hesitation" if a global slowdown jeopardises the country's economic recovery.
Recent yen appreciation and falls in share prices could fuel speculation for further central bank monetary easing.
Japan's economic growth likely slowed in April-June as cooling global demand and trade tensions weighed on exports, but brisk domestic demand offset some of the external pressure, a Reuters poll showed.
The government will announce the growth data on Friday.