Japan Oct household spending seen falling after sales tax hike - Reuters poll

TOKYO (Reuters) - Japan's household spending is expected to have fallen at the fastest pace in about 1-1/2-years in October after a hike in the sales tax, a Reuters poll showed on Friday.

Household spending likely fell 3.0% in October from a year earlier, the poll of 15 economists found, the fastest pace of decline since May 2018 when it fell 3.8%.

Japan raised the sales tax to 10% from 8% on Oct. 1, a move that is seen as critical for fixing the country's tattered finances.

From the previous month, household spending was seen falling 9.8% in October, the fastest pace of drop since April 2014 when the nation previously raised the sales tax.

In September, household spending year-on-year rose at the fastest pace on record as consumers rushed to buy goods before the tax increase.

"We expect spending on such as durable goods and luxury products fell after it was boosted ahead of the tax hike," said Koya Miyamae, senior economist at SMBC Nikko Securities.

"Also a huge typhoon during the three-day holiday last month likely damaged service spending."

The government will announce household spending data at 8:30 a.m. Japan time on Dec. 6 (2330 GMT, Dec.5).

Data last week showed retail sales fell at the fastest pace in more than 4-1/2 years in October, raising a red flag over the strength of domestic demand, which has been helping buoy the economy in the face of a prolonged export slump.

A slew of gloomy data this week may further fuel calls on the government to compile a large stimulus package to help the economy.

(Reporting by Kaori Kaneko; Editing by Kim Coghill)