May household spending in Japan is poised to decline year-on-year, extending a streak amid elevated living costs and tough comparisons.
Japan’s cash earnings data is expected to show continued strength in July, reflecting stable wage growth. However, household spending likely fell for a sixth straight month in May, as consumers cut back due to persistently high living costs.
The decline follows a sharp spending surge in May 2025, driven by pent-up demand for vehicles after Toyota’s production disruptions eased. Analysts note the comparison base makes this year’s drop appear steeper.
Markets will watch for signs of sustained consumer weakness, which could weigh on Japan’s economic recovery.