Japan Household Spending: Updated July 1, 2024

 

Japan's FY 2023 household spending down 3.2% on rising prices

Article Source:  https://mainichi.jp/english/articles/20240510/p2g/00m/0bu/006000c

Ideas:

Household spending in Japan has never been as strong as it should be as Japanese households are not the big spenders like in the US. Japanese, for the most part, have been savers, but everyone or every household is different and each have their own spending habits and desires.

At the same time, inflation has definitely affected consumer spending in Japan as many households have cut back on different items.

Unfortunately, the fixed income groups are more affected than the regular income groups as they only have so much to spend and any price increase cuts into what they do have and they might have to cut back on one item to buy another item.

Import prices and the weak yen, are definite causes are reasons for the increase in price, along with global raw material price increases which might too be related to the weak Japanese yen,

And don't forget energy/oil/gas prices, global prices have continued to increase and as Japan is a resource-poor country, Japan needs to import much of what it needs.

If Japan doesn't have already, they need trade agreements with oil producing countries so that they are not at the mercy of oil price swings or even the weak Japan yen and imports.

Wage increases in 2023 were supposed to help Japanese workers but it seems wage increases were not enough to overcome increases in inflation. At the same time, some 70 percent of Japanese wage earners don't work for the large Japanese companies, and as such, they might not have gotten a wage increase in 2023.

Its important to remember that the 30 percent for food might be 40,50 percent for low-income or fixed income groups. Meaning for the total income, they have to use more of what they have for food than the regular income earners.

And again, as prices have increased, the all income earners might decide to cut back on this or that, as needed, to make ends meet or stay within their budgets.

Cram schools, to be fair and honest should not be even a part of regular education, as the regular schools should be able to meet the needs of the students. Unfortunately, even in Japan status is important and parents want their children to go the best schools possible instead of just letting the students go the the schools they want.

Even though there were government subsidies related to utilities, most likely Japanese households cut back as needed if the weather cooperated, which it did this past winter.

But the same situation might not happen this summer as its most likely going to be another hot summer in Japan, and for the most part, its already hot. Last summer the summer heat lasted well into late September even early October.

Japanese households only have so much to spend, and if inflation continues to increase or has continued to increase, and wages haven't increased, and are usually only increased in April of each year, Japanese households are constantly subject to inflation increases and no wage increases.

Entertainment is always subject to being an extra income situation and again, as inflation has continually increased in Japan, entertainment for some or many households might be reduced as way to save and or keep their budgets in line.

Japanese households, like any around the world, respond to incentives and as the Japanese government had an incentive for travel, many Japanese might have taken advantage of the government travel program.

Yes, the extra weekend might have been enough to increase food spending for the month, but in reality it was not extra spending just a continuation of spending for the month.

Again, Japanese consumers, for the most part are not big spenders and consumer spending in the Japanese economy might be around 50 percent of GDP but its never as high as it should be for the 3rd or 4th largest economy in the world.

Wage increases need to continue to help Japanese consumers feel good about their wages and then maybe, just maybe they will begin to spend a little more to increase economic growth in the Japanese economy.

Have a nice day and be safe!