Japan Household Spending Drops 3.3% in June

Japan's household spending declined by 3.3% year-on-year in June, missing market expectations of a 1% increase.

This marks the third consecutive month of decline, underscoring persistent consumer caution despite modest wage growth.

The contraction in household spending is a key indicator for the Bank of Japan (BOJ) as it weighs the timing of further interest rate hikes.

Consumer spending accounts for more than half of Japan's GDP, so a sustained decline could signal weakening domestic demand, complicating the BOJ's path toward normalizing monetary policy.