FX.co ★ Japan Personal Spending Falls the Most in 6 Years

Japan’s household spending fell 6.8% year-on-year in September 2026, a sharper decline than both August’s drop and market expectations of a 3.1% decrease. This marked the tenth consecutive month of contraction and the steepest fall since September 2020, underscoring the drag from persistent inflation and rising borrowing costs.

Spending weakened across most categories: food (-2.5% vs -1.4% in August), utilities (-10.5% vs -5.2%), healthcare (-7.6% vs -1.9%), education (-23.5% vs -12.3%), furniture and household goods (-6.4% vs -6.3%), and culture and recreation (-8.7% vs -4.3%). Outlays on transport and communication also slumped (-9.1% vs 0.2%), while the decline in clothing expenditure moderated (-3.6% vs -8.7%). Housing expenditure was unchanged after a 5.8% fall in August.

On a seasonally adjusted monthly basis, household spending declined 2.8%, reversing a 0.1% increase in August and missing forecasts for a 0.3% gain. It was the first month-on-month decline in three months.