Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Japan's household spending falls as rising costs squeeze consumers

Economy Jun 06, 2022 09:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A man looks at a shop at the Ameyoko shopping district in Tokyo, Japan, May 20, 2022. REUTERS/Kim Kyung-Hoon

By Daniel Leussink

TOKYO (Reuters) - Japan's household spending fell faster than expected in April as the yen's sharp decline and surging commodity prices pushed up retail costs, hitting consumer confidence and heightening pressures on the battered economy.

Spending improved from the previous month as households showed increasing appetite for services such as eating out, but the month-on-month rise was smaller than expected, suggesting the drag from the pandemic remained.

In a sign of trouble for the economy, real wages shrank at the fastest pace in four months in April as prices posted their biggest jump in more than seven years, weighing on household purchasing power.

Household spending decreased 1.7% in April from a year earlier, government data showed, faster than the market forecast for a 0.8% decline in a Reuters poll, dragged down by lower spending on cars and vegetables.

The month-on-month figures showed a 1.0% increase, also weaker than a forecast 1.3% rise.

"Higher energy and food prices are having a big impact and suppressing consumption," said Takeshi Minami, chief economist at Norinchukin Research Institute. "While a spending recovery remains intact, its pace is slowing."

The data raises some concerns for policymakers worried about the growing hit households are taking from rising prices for daily essentials and a weakening yen, which is pushing up import costs and making consumers hesitant to spend.

Households were becoming more accepting of price rises, Bank of Japan Governor Haruhiko Kuroda said on Monday, adding that a weak yen in general was likely to have a positive impact on the economy as long as its moves were not extreme.

The yen hit a fresh two-decade low against the U.S. dollar early on Tuesday, last trading around 132.20 yen per dollar.

A government official downplayed the impact of price rises on the cutback in food spending, saying it had already been on a declining trend from the spring of last year, a reflection of shrinking demand for eating at home.

But the outlook for consumer sentiment was extremely worrying, the official said, adding that it should be watched.

Government data on Tuesday also showed inflation-adjusted real wages shrank 1.2% in April, dropping at their fastest pace in four months as a 3.0% jump in consumer prices outpaced a gain in nominal wages.

"The problem is structural. It feels like the situation where wages and prices are not rising in line with each other can't be left behind," said Minami.

Japan's economy is expected to rebound in the current quarter following a contraction in January-March, though it faces increased pressures from high raw material and energy prices as well as the weak yen.

Japan's household spending falls as rising costs squeeze consumers

Related Articles

U.S. Weekly Jobless Claims Rise to 262,000
U.S. Weekly Jobless Claims Rise to 262,000 By - Aug 11, 2022

By Scott Kanowsky -- Jobless claims in the U.S. edged higher last week, in a sign of a potential loosening in the country's tight labor market. Initial unemployment...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Larry Layton
Larry Layton Jun 06, 2022 9:35PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
oh, so Japan does have inflation unlike their officials claim
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email