Japan Households Trim Spending for Eighth Consecutive Month Amid higher Inflation

Akira Ito
04 Sep, 2026
Tokyo

Japan's indexes rebounded after falling in four previous sessions as investors reviewed the rate outlook. 

The Nikkei 225 Stock Average increased 1%, the broader TOPIX traded around the flatline, and the yen strengthened to 156.03 against the U.S. dollar. 

The yen advanced more than 3% over the last three sessions, and investors are estimating a potential rate hike by the Bank of Japan as early as this month to contain inflationary pressures.  

 

Japan's Household Spending Declined Eighth Consecutive Month in July

Japan's household spending adjusted for inflation declined for the eighth consecutive month in July, according to the Ministry of Internal Affairs & Communications.  

The spending declined partly because of lower temperatures and rising prices, government data showed. 

Households of two or more spent an average of 301,245 yen, or $1,930, which represents a 3.6% decline from a year ago, marking the fastest pace of decrease since January 2024, when it fell by 6.3%. 

Household spending is a key economic indicator of private consumption, which accounts for more than half of a country's gross domestic product. 

Spending on food and beverage eased 1.3% despite rising prices, but lower temperatures compared to a year ago pushed down demand for beverages. 

Energy and water bill outlays dropped 9.2% in July compared to a year ago, most likely due to reduced air conditioning use as a result of lower temperatures this month. 

The average monthly income of salaried households of at least two or more individuals fell 3.8%, after adjusting for inflation, to 689,476 yen, according to the ministry. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 1% to 64,896.03, and the broader TOPIX edged down a fraction to 4,101.72. 

For the week, the Nikkei 2225 Stock Average declined 2.4%, and the broader TOPIX decreased 1.3%. 

The Nikkei 225 experienced a volatile week, dropping sharply mid-week before staging a late rebound on Friday. 

Kioxia Holdings increased 6.6% to ¥55,090.0, SoftBank Group jumped 10.2% to ¥5,525.0, Fujikura Technology advanced 3% to ¥5,100.0, and Taiyo Yuden soared 8.5% to ¥9,546.0.