Japan Household Spending Falls 6.8%, Tenth Straight Month

Japanese household spending fell 6.8% year over year in September, far more than economists expected and its steepest decline since September 2020. It marked a tenth consecutive annual drop, while seasonally adjusted spending fell 2.8% from August. Weakness extended across categories including food, recreation, transport and education; officials said unusually persistent heavy rain and typhoons kept people from going out, though the broad declines point to wider softness in consumption. The slump comes despite rising wages and household income, raising questions about why improved purchasing power is not translating into stronger spending. The data could weigh on the Bank of Japan’s deliberations over further interest-rate increases, including a possible December hike.