Japan Household Spending Rises 1.4% July Below Forecasts

Japan's household spending increased by 1.4% year-on-year in July 2025, marking the third consecutive month of growth, though this was below the market expectation of a 2.3% rise. On a monthly basis, spending rose by 1.7%, recovering from a 5.2% decline in June but still falling short of the anticipated 1.3% increase. The slower-than-expected growth reflects ongoing cost pressures which may dampen consumer demand and impact sectors such as consumer discretionary and retail. Despite the modest improvement from the previous month's 1.3% rise, the data suggests a cautious consumer environment. Market reactions are likely to be short-term, influenced by sentiment around consumer confidence and spending power. The official data was released by Japan's Ministry of Internal Affairs and Communications.