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.

Source: Investing Live