HomeLive CommentsJapan's household spending falls -6.3% yoy in Jan, deepening contraction

Japan’s household spending falls -6.3% yoy in Jan, deepening contraction

Japan reported significant decline in household spending in January, marking the 11th consecutive month of contraction. The decrease of -6.3% yoy was well below expectation of -4.3% yoy, representing the steepest annual drop since February 2021. Furthermore, on a seasonally adjusted month-on-month basis, spending fell by -2.1%, starkly contrasting with the expected 0.4% increase.

The Ministry of Internal Affairs and Communications highlighted several one-off factors contributing to this pronounced decrease. Notably, reduction in new car purchases, attributed to factory suspensions, played a significant role. Additionally, lower energy bills, a result of unusually warm weather, further depressed spending levels.

Moreover, the Ministry pointed out that the comparison with the same month last year is skewed due to a temporary boost in spending from post-pandemic travel subsidies.

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