Japanese household spending fell 3.6% year on year in July, marking an eighth consecutive month of decline and undershooting forecasts, government data showed.
The drop in consumer spending was sharper than the median market expectation of a 1.6% fall, highlighting continued weakness in household demand in the world’s fourth-largest economy.
On a seasonally adjusted monthly basis, spending edged up 0.5%. Economists had expected a 2.6% increase.
The figures, compiled by Japan’s Internal Affairs Ministry, will be closely watched by the Bank of Japan as it considers whether to raise interest rates as early as September.
Household consumption is a key indicator for the central bank, which has been assessing whether economic conditions are strong enough to support further monetary tightening.
Japan’s official release schedule lists the July household spending data for publication on 4 September 2026.
