Nikkei 225 Halted 3-Day Rally, Household Spending Expanded In December but Fell In 2024

Akira Ito
07 Feb, 2025
Tokyo

Stock market indexes in Tokyo trimmed weekly gains amid fears of a rate hike at the next policy meeting after household spending rose in December. 

The Nikkei 225 stock average and the TOPIX decreased 0.4% in Friday's trading, and they advanced about 0.5% in the week. 

Japan's household spending rose at a faster pace in December, increasing for the third month in a row amid rising food prices. 

Household spending in December advanced an annual 2.7% in December, the first increase in five months, driven by higher spending for vehicles boosted by winter bonuses.

Despite the jump in household spending in December, the average monthly spending in 2024 declined 1.1% after adjusting for inflation to 300,243 yen, or about $1,967.

The monthly survey of spending by households of two or more is released by the Ministry of Internal Affairs and Communications. 

Food spending, which accounts for the bulk of spending, declined 0.4%, the fifth annual fall in a row. Poor weather drove prices of rice to a record high.

Food expenses soared to 28.3% of total household spending and surged to the highest since record keeping began in 2000.

Spending for transportation and communications fell 4.1%, utilities declined 6.8%, but housing cost increases slowed to 15.8% from 18.7% in the previous month.

The latest household spending data supported the Bank of Japan's case for a virtuous cycle of rising prices and wages to support additional rate increases, and the yen strengthened to 151.78 against the U.S. dollar. 

Japan Indexes and Stock Movers 

The Nikkei 225 Stock Average declined 0.7% to 38,787.02, and the broader TOPIX fell 0.5% to 2,737.23.

Tokyo Electron Ltd. dropped 4.1% to ¥25,500.0 after the advanced semiconductor equipment company confirmed its expansion plans despite worries about intensifying competition and durability of industry growth. 

Konica Minolta declined 8% to ¥561.0, and the electronic goods maker said revenue increased but profit dropped in the nine-month period ending in December.

The medical imaging company said revenue increased 3.5% to 831.8 billion, net loss expanded to 13.2 billion yen from 4.4 billion yen, and diluted loss per share increased to 27.09 yen from 8.37 yen a year ago.

The company reiterated its full-year revenue increase estimate of 2.4% to 1.1 trillion yen and zero profit and earnings per share.