Japan Household Spending Slumps Again Amid Rising Prices

Japan's household spending declined for an eighth consecutive month in July, with real spending down 3.6% compared to the same period last year.

The Ministry of Internal Affairs and Communications reported that households are still grappling with higher prices for daily necessities, particularly food, despite efforts by officials to control energy costs.

Spending on housing repairs and automobile-related expenses also fell significantly in July, further weighing on overall growth.

Economist Junwen Pang at Daiwa Institute of Research attributed the rising prices to tensions in the Middle East and a weaker yen, which has led to higher crude oil and naphtha costs.

Pang expects consumption to increase moderately going forward, but noted that companies may continue to pass on higher costs to consumers due to the ongoing situation in the Middle East.