Japan Personal Spending Unexpectedly Falls

Household spending in Japan declined 2.6% yoy in December 2025, missing market expectations for a flat reading and marking a deeper contraction after a 2.9% drop in the previous month. The latest result indicated that consumer demand remained fragile at the end of the year amid elevated living costs. The sustained weakness in personal consumption underscores ongoing challenges for Japan’s economic recovery and adds to concerns that private demand may struggle to gain momentum despite supportive monetary conditions. Monthly, personal spending fell 2.9%, underperforming forecasts of 1.3% decrease and swinging from a 6.2% jump in November, which had marked the strongest monthly rise since March 2021.

Household spending in Japan increased 2.9% yoy in November 2025, defying market expectations for a 0.9% decline and reversing a 3.0% drop in the previous month. It marked the steepest rise since May, supported by higher winter-related purchases and easing inflation pressures on some essential goods. Spending bounced back across several major categories, led by food (0.9% vs -1.1% in October), furniture and household items (10.6% vs -0.3%), transportation and communication (20.4% vs -9.2%), and culture and recreation (2.2% vs -0.6%). At the same time, growth accelerated in clothing and footwear (7.5% vs 6.3%) and education (10.2% vs 7.6%). Elsewhere, declines moderated in housing (-1.8% vs -9.1%) and fuel, light, and water charges (-1.2% vs -3.2%), while spending on medical care softened slightly (2.6% vs 3.6%). On a monthly basis, personal spending jumped 6.2%, easily beating forecasts of 2.7% and swinging from a 3.5% contraction in October.

Household spending in Japan fell 3.0% yoy in October 2025, missing market expectations for a 1.0% rise and reversing a 1.8% gain in the prior month. It marked the first decline since April and the steepest pace since January 2024, underscoring persistent cost pressures heading into year-end. The Internal Affairs Ministry pointed to softer household spending on food, entertainment, and automobiles as the main drivers of the decline. Officials stressed that it is too early to determine if the weakness is transitory, emphasizing that consumption overall remains in a recovery stage. On a monthly basis, personal spending fell 3.5%, against consensus of a 0.7% increase and after a 0.7% decrease in September.