AI Data Insight
The latest data shows that Japan's real household spending in the third quarter of 2026 (Q3 2026) fell by 3.3% year-on-year, widening further from the 3.1% decline in the previous quarter and falling far short of market expectations. Sticky inflation and shrinking real wages have led to budget tightening, and the weak domestic demand performance is likely to add uncertainty to the Bank of Japan's interest rate hike decision in September.