FX.co ★ Japan Personal Spending Rises Less than Expected

Household spending in Japan increased by 1.8% year-on-year in September 2025, falling short of market expectations of 2.5% and down from a 2.3% growth rate recorded in the previous month. Despite the deceleration, this represents the fifth consecutive month of rising personal expenditure, suggesting a sustained, albeit slower, recovery in consumer activity. Growth in spending was more subdued in sectors such as transportation and communication, which rose by 11.5% compared to 13.5% in August, and in culture and recreation, where the growth rate declined to 6.4% from 12.2%. Meanwhile, expenditures were weaker in categories like food, which dropped by 0.5% following a 1.2% decrease; housing, which fell by 7.0% compared to a 0.7% decline; fuel, light, and water charges, which decreased by 2.4% after a previous 4.7% rise; education, which plunged by 6.0% following a 16.9% increase; and clothing and footwear, which decreased by 7.4% after a 5.4% rise. Conversely, spending accelerated for medical care, which surged by 11.1% compared to a previous growth of 1.7%, and rebounded for furniture and household items, showing a 0.5% increase after a 6.8% decline. On a monthly basis, personal spending declined by 0.7%, reversing the 0.6% increase seen in August, marking the first drop in three months.