Japan data huge miss – Household spending plummets in oct, down 3% y/y vs. +1% expected

Japan’s household spending slumped sharply in October, underscoring persistent weakness in consumer demand and challenging the view that wage gains are feeding through to consumption.

All Household Spending fell 3.0% y/y, badly missing expectations for a 1.0% rise,

while month-on-month spending dropped 3.5%, far below the forecast 0.7% increase.

The declines reverse September’s modest gains and highlight the drag from higher living costs and cautious consumer behaviour ahead of year-end.

The data arrives at a sensitive moment for the Bank of Japan as it weighs a December rate hike. While wage momentum and inflation dynamics have strengthened, today’s figures underline the fragility of household demand — a potential complication for policymakers seeking confirmation of sustainable, demand-led inflation.