Japan Household Spending Falls for 10th Straight Month

Household spending in Japan declined 6.8% in September compared to a year prior, marking the 10th consecutive month of reduction and the most significant drop since September 2020 when the COVID-19 pandemic severely impacted consumer activity, as reported by government data released on November 10. The Ministry of Internal Affairs and Communications stated that the average monthly consumption expenditure for households of two or more individuals was 289,536 yen in September, representing a 6.8% decrease in real terms, excluding price changes.

This decline was observed across various categories, including food, entertainment, and leisure activities. Food expenditures, which constitute a significant portion of household budgets, decreased by 2.5% in real terms, while spending on culture and recreation fell by 8.7%, indicating reduced consumer activity during the month.

Weather conditions, such as typhoons and heavy rainfall, also negatively affected spending, as people were discouraged from going outdoors and had fewer opportunities for shopping and leisure activities due to the unsettled weather. The ministry noted that severe weather during August and September contributed to the reduced purchasing opportunities for consumers.

The September figures signify the steepest year-on-year contraction in real household spending in six years, highlighting the vulnerability of consumer demand to disruptions in daily activities and raising concerns about the strength of domestic consumption.