| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -3.7% | -5.0% to -0.7% | -6.4% | 3.7% |
| Year over Year | 0.1% | -2.5% to 3.1% | -3.3% | -0.4% |
Highlights
Japan’s real average household spending posted the seventh straight year-on-year drop in June, down 3.3% (consensus +0.1%) after a slight 0.4% dip in May, as consumers paid less for health insurance premiums, airfares and gasoline. Typhoon weather and lower temperatures compared to a year earlier also dampened sales of clothing and appliances including air conditioners. The decrease was partly offset by home maintenance and repairs as well as the recent widespread markups in private university tuition fees.
Autos and related items, a widely fluctuating category, pushed down overall spending by 0.34 percentage point after trimming May expenditures by 2.30 points. Excluding home maintenance and repairs and other volatile items like vehicles and gift money, the core measure fell 4.3% (down 2.5% in nominal terms) after rising 2.6% (up a nominal 4.3%) the prior month.
The seasonally adjusted expenditures index plunged 6.4% on the month (consensus -3.7%) to 95.2 after surging 3.7% to a 12-month high of 101.7 in May and rising 1.6% to 98.1 in April.
The consumption trend index for households with two or more people showed a real 0.5% increase on quarter in April-June after rising 0.7% in January-March and slumping 3.2% in October-December. It indicates private consumption remains resilient in the G2 GDP data due on Aug. 17, which is forecast to post a modest 0.6% rise on quarter, or an annualized 2.3%. The economy grew 0.5% on quarter (1.8% annualized) in Q1, when rebounds in net exports and public works spending as well as resilient consumer spending led the second quarterly expansion, recovering from a 0.6% (2.3% annualized) contraction in the third quarter of 2025.
Details:
Japan June real household spending -3.3% y/y (May -0.4%), 7th straight fall; median forecast +0.1% (range: -2.5% to +3.1%)
Japan June real household spending s/a -6.4% m/m (May +3.7%), 1st fall in 3 months; median forecast -3.7% (range: -5.0% to -0.7%)
Japan June real core household spending (ex-housing, vehicles, gift money) -4.3% y/y vs. +2.6% in May when overall spending fell 0.4%
Japan June household spending y/y fall led by lower medical insurance premiums, airfares, gasoline
Japan June average real household income +2.0% y/y (May +0.7%); +3.9% in nominal terms (May +2.4%)
Japan Q2 consumption trend index real s/a +0.5% q/q vs. +0.7% in Q1, indicating private consumption resilient in Q2 GDP due Aug. 17
Economists expect Japan Q2 GDP to grow 0.6% q/q (2.3% annualized) vs. +0.5% (+1.8% annualized), led by resilient consumption, capex despite high costs
Market Consensus Before Announcement
Japan's real household spending is projected to edge higher from a year earlier in June after declining for the last six months. It is expected to rise 0.1 percent after slipping 0.4 percent a month earlier as spending shows signs of stabilizing despite rising persistent inflation.
Household spending in June is seen edging up from a year earlier amid mixed economic signals. New passenger car registrations picked up, along with nationwide department store sales were higher. Conversely, supermarket sales edged down as cooler-than-usual temperatures limited demand for seasonal goods, while persistently rising prices also weighed on sales. Convenience store sales also edged lower in June.
Higher import costs stemming from a weaker yen and prolonged geopolitical tensions in the Middle East, has continued to weigh on household spending, as suggested by supermarket sales.
Demand for durable goods is expected to be supported by purchases of air conditioners amid hot weather and ahead of April 2027 when the government is scheduled to introduce stricter energy-efficiency standards.
On the month, real average spending by households with two or more people is forecast to fall 3.7 percent in June after increasing 3.7 percent a month earlier. It rose 1.6 percent in April after falling 1.3 percent in March and rebounding 1.5 percent
in February.
In May, household spending edged down as the effects of weaker automobile purchases and a decline in domestic travel were partly offset by strong demand for air conditioners.
Definition
Household Spending is an important gauge of personal consumption, which accounts for roughly 55 percent of Japan's gross domestic product. It is part of the monthly Family Income and Spending Report.
Description
The report looks at spending of households and gives a picture of consumer spending. Increases in household spending are favorable for the Japanese economy because high consumer spending generally leads to higher levels of economic growth. Higher spending is also a sign of consumer optimism, as households confident in their future outlook will spend more. The preferred number is the change from the previous year. The data are part of the family income and expenditure survey which is released at the same time as the employment and unemployment data.