Household spending in Japan fell 0.4% yoy in May 2026, following a 0.5% decline in the prior month and beating market expectations for a 2.5% fall. It marked the sixth straight month of contraction but the softest in the sequence, suggesting consumer spending was showing some resilience despite persistent inflation and weak real wage growth. Spending remained weak on transport and communication (-15.8% vs 7.5% in April), utilities (-7.6% vs -8.6%), and culture and recreation (-3.1% vs 6.3%). Meanwhile, expenditure rose on food (2.4% vs -0.6%), housing (0.7% vs 7.6%), furniture and household goods (23.0% vs 19.0%), healthcare (3.3% vs 6.7%), clothing and footwear (4.0% vs -10.9%), and education (21.7% vs -19.4%). On a seasonally adjusted monthly basis, household expenditure rose 3.7%, accelerating from 1.3% in April and exceeding forecasts of 1.4%. It was also the fastest monthly increase since last November.

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