FX.co ★ Japan Personal Spending Drops the Least in 6 Months

Japan’s household spending fell 0.4% year-on-year in May 2026, following a 0.5% decline in April and performing significantly better than market expectations of a 2.5% drop. Although this marked the sixth consecutive month of contraction, it was the mildest in the current sequence, indicating that consumer spending is showing some resilience despite ongoing inflation and weak real wage growth.

By category, spending remained subdued for transport and communication (-15.8% vs -7.5% in April), utilities (-7.6% vs -8.6%), and culture and recreation (-3.1% vs -6.3%).

In contrast, expenditure increased on food (2.4% vs -0.6%), housing (0.7% vs -7.6%), furniture and household goods (23.0% vs 19.0%), healthcare (3.3% vs -6.7%), clothing and footwear (4.0% vs -10.9%), and education (21.7% vs -19.4%).

On a seasonally adjusted month-on-month basis, household spending rose 3.7%, up from a 1.3% increase in April and well above the consensus forecast of 1.4%. This was also the strongest monthly gain since November of the previous year.