FX.co ★ Japan Personal Spending Unexpectedly Falls

In December 2025, household spending in Japan fell by 2.6% year-on-year, contrary to market expectations for no change and marking a deeper contraction following a 2.9% decrease in the prior month. This recent data signals that consumer demand remained fragile at the year's end, largely due to elevated living costs. The persistent weakness in personal consumption highlights ongoing challenges for Japan’s economic recovery and raises concerns that private demand might struggle to gain momentum, even with favorable monetary conditions. On a month-to-month basis, personal spending decreased by 2.9%, missing forecasts of a 1.3% decrease and reversing from a 6.2% surge in November, which was the most significant monthly increase since March 2021.