Japan's Household Spending Drops for Seventh Straight Month

Japanese households have been reluctant to spend despite having savings, according to recent data. The country's household spending in June declined by 3.3% year-on-year, marking the seventh consecutive month of contraction and falling far short of market expectations for a 1% increase.

The month-on-month drop was also significant, at 6.4%, exceeding forecasts. This contrasted sharply with real wages, which posted their sixth straight month of growth in June.

This divergence has clouded the outlook for a Bank of Japan rate hike in September, potentially leading markets to push back expectations for the timing of such a move and exerting downward pressure on the yen in the near term.