Japan Personal Spending Rises Less than Expected

Household spending in Japan increased by 1.4% yoy in July 2025, following a 1.3% growth in the previous month and marking the third straight month of rise in personal expenditure. However, figures were below market estimates of 2.3%, reflecting the impact of elevated cost pressure and broad U.S. tariffs. Expenditures continued to rise for medical care (11.5% vs 8.9% in June), transportation & communication (14.8% vs 8.6%), utilities (4.8% vs 6.3%), furniture & household items (0.8% vs -5.0%), and education (9.5% vs 3.5%). In contrast, spending fell further for food (-1.8% vs -2.1%), clothing & footwear (-0.4% vs -6.6%), and culture & recreation (-4.1% vs -1.0%). Also, housing expenditure shrank 5.9%, reversing a 11.6% decline in June. On a monthly basis, spending rose 1.7%, reversing a 5.2% decline in June but missing the consensus of 1.3%.