AI Data Insight
Japan's newly released real household spending for Q1 2026 fell 1.8% year-over-year, further deteriorating from the -1.0% decline in the previous period, highlighting that domestic demand momentum remains weak. High living costs and real wage pressures continue to erode consumer purchasing power, making a short-term domestic demand recovery highly challenging. Moving forward, it is necessary to closely monitor the boosting effect of the "Shunto" wage negotiations on real consumption.