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Digitization key to a Japanese consumer spending spree

E-commerce adoption could induce households to spend record savings

Japan lags behind other advanced economies in e-commerce, which has slowed its economic recovery from the pandemic despite government handouts designed to lift spending.

TOKYO/NEW YORK -- Japanese household consumption is likely to be boosted by a spending spree before too long, as the government introduced cash handouts after the pandemic hit the economy. But in the meantime, statistics show that Japan's consumption has plunged the most among advanced economies.

Monthly retail sales in most advanced economies are higher than they were before the pandemic. But in Japan they are still below pre-pandemic levels and household savings and cash are now at a record high. To induce people to spend more of these hoards, efforts to further digitize the economy will be essential.

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