FX.co ★ Japan Household Spending Unexpectedly Declines in April

In April 2025, household spending in Japan decreased by 0.1% compared to the same period last year, following a 2.1% increase in March. This decline also did not meet market expectations, which anticipated a 1.4% rise. It constitutes the second year-over-year drop in spending recorded this year. The downturn can be primarily attributed to reduced spending across several essential categories, including medical care, which fell by 4.4%, clothing and footwear by 2.1%, fuel, light and water charges by 1.2%, and furniture and household utensils by 0.4%. Conversely, there was an increase in spending in sectors such as housing, showing a significant rise of 10.9%, culture and recreation with a 7.9% increase, education up by 5.1%, transportation and communication rising by 2.4%, and food with a modest increase of 0.3%. On a month-to-month basis, household spending saw a 1.8% decline in April, following a 0.4% gain recorded in March, which was sharper than the forecasted 0.8% decrease, further underscoring the ongoing challenges faced by consumer demand.