Japan’s household spending slumped sharply in October, underscoring persistent weakness in consumer demand and challenging the view that wage gains are feeding through to consumption.
All Household Spending fell 3.0% y/y,
- badly missing expectations for a 1.0% rise
- prior +1.8%
While month-on-month spending dropped 3.5%
- far below the forecast 0.7% increase
- prior -0.7%
The declines reverse September’s modest gain y/y and highlight the drag from higher living costs and cautious consumer behaviour ahead of year-end.
The data arrives at a sensitive moment for the Bank of Japan as it weighs a December rate hike:
While wage momentum and inflation dynamics have strengthened, today’s figures underline the fragility of household demand, a potential complication for policymakers seeking confirmation of sustainable, demand-led inflation.
