According to the August Family Income and Expenditure Survey released by the Ministry of Internal Affairs and Communications, real consumer spending by households of 2 or more people fell 3.1% year on year, marking the ninth consecutive month of decline. On a seasonally adjusted month-on-month basis, spending rose 0.1% in real terms, but fell short of the 0.5% increase expected by the market.
According to the August Family Income and Expenditure Survey, real consumer spending by households of 2 or more people fell 3.1% year on year, marking the ninth consecutive month of decline. Consumer spending per household fell 1.0% in nominal terms, while seasonally adjusted spending rose 0.1% in real terms from the previous month, marking a second consecutive monthly increase. This fell short of the 0.5% increase expected by the market.
Although real wage growth has exceeded the year-earlier level for 8 consecutive months, rising prices and uncertainty about the economic outlook are curbing households' willingness to spend, and wage gains have not yet fully fed through to consumption.
Japan's personal consumption has remained sluggish since the start of 2026 because of high prices and the weaker yen. Government subsidies have provided some support, but their effect is considered limited, warranting continued caution over the sustainability of the consumption recovery.
The data are expected to be a factor in the Bank of Japan's future monetary policy decisions, and trends in personal consumption will continue to draw attention as the key focus of policy deliberations. Going forward, the pace of deceleration in price trends, the yen exchange rate and developments in autumn wage negotiations will be important factors affecting consumption.