Japan household spending drops more than expected in September

Japanese household spending declined more than anticipated in September, marking a 10th consecutive drop, due to adverse weather and a weak yen, according to data released by the internal affairs ministry on Tuesday. The year-on-year decrease in household spending was 6.8%, surpassing market expectations of a 3.1% drop. This represents the most significant decline in household spending since September 2020.

On a month-to-month basis, adjusted spending fell 2.8%, in contrast to market predictions of a 0.3% increase. The Bank of Japan will consider this data when deciding whether to raise interest rates further, with many analysts expecting the next rate increase as early as December. The spending data is a stark contrast to recent wage figures, as Japan's real wages grew for the ninth consecutive month in September, while nominal wages increased at the fastest rate since January 1997.