Japanese Household Spending: Updated April, 6, 2025.

Japan's household spending falls 0.5% on year in February.

Article source: https://mainichi.jp/english/articles/20250404/p2g/00m/0bu/012000c

Ideas:

Japanese consumers, like all consumers globally, don't like surging prices and so they either look for substitutes of equal quality and or begin to cut back on their spending which is whats going on in Japan now.

Some, again, might be looking for quality substitutes but as other articles have suggested there are so many food products with their prices increasing there might not be any good substitutes available that haven't increased in prices too.

Food prices and inflation has been a major challenge since the pandemic and you would have thought that the Japanese government might have tried to find a way to lower prices, as if they, which they have, nothing has really worked so far.

Spending 290,511 might be low or it might be low depending on what you see or look at. For example, as inflation has continued in Japan that 290,511 might include how much prices have gone up which means for example, if inflation had not gone up that 290,511 yen might be much lower.

It's highly unlikely that a Japanese family of 3 or 4 might have spent even more as they might have had to buy more food, more clothes for the children, school expenses and so on. so the 290, 511 might be the lower amount that larger families might have had to spend even more

And then there are the lower-income and fixed income groups that might not have been able to spend that much so their spending might have been significantly much lower, as they probably had to cut back on their spending and even tried to look for more substitutes as a lower price with the idea that they had to sacrifice quality for the get the lower price.

And again, as inflation continues on in Japan that 1.8 percent increase in spending might just be related to an increase in prices and not really an increase in Japanese consumers just buying more to buy more.

But. all things being equal, an economic saying, an increase of 1.8 percent was not really that much of an increase, for example, if you take out inflation and price increases.

Consumer spending or household spending makes up about 50 percent of Japan's GDP, which is much lower than what US consumers spend which is about 60+ percent of the US GDP.

Japanese consumers, for the most part, have been more savers than spenders so maybe the reason they don't spend like US consumers.

Fresh food items are subject to many different variables which can increase or decrease the price of food products, such as weather, the time of year, hot or cold temperatures and so on which can increase the supply or decrease the supply of a food product.

And then add in the idea that most fresh food items are sold at auctions which can be a variable too as suppliers and vendors sometimes can control the auction markets to get a higher prices, which then means the final customer will pay even more for the product, which is probably what has happened with the rice market in Japan these days.

It seems Japan usually has a lot of Japanese people going to the hospitals and clinics as medical care is very cheap in Japan compared to the US, so they go for any reason, because they have to pay that much.

And yes, there might have been less flu cases this winter as maybe the usual flu spike in the winter wasn't as severe as past winters.

Clothing retailers spend a lot of determining what demand for their clothes products are going to be and they plan months not years in advance for each new season. For example for the spring season they might start displaying their spring clothes just after the Xmas season has ended and if there is a long winter, consumers might wait until they actually begin to feel and see spring, so retailers might have new spring clothes sitting on the racks for a few months without much in sales.

In this situation if should be remembered that air conditioners can double as heaters too so it could be a little misleading unless you read carefully.

Yes, the winter cold seemed to last a little longer than usual this year in Japan, which might be related to global warming or maybe not.

So unless the Japanese government implemented more energy subsidies for Japanese households that means less disposable income for households to use in the Japanese economy.

Household spending or consumer spending might be half of Japan's GDP, but its much lower than the US consumer spending at around 60+ for consumer spending.

But you can't compare apples to oranges in this situation, as US consumers and Japanese consumers are different kinds of spenders as Japanese spenders, for the most part, have been savers in the past, which US consumer have been, up until recently, free-wheeling spenders, but times do change and that doesn't mean all Japanese consumers are mostly savers and all US consumers are free-wheeling spenders.

It must be remembered that the 571,993 might just be an average as there might be just as many above that amount and just as many below that amount.

This might be good time to talk about the increase in income equality in Japan which keeps getting bigger every year.

Income inequality is the difference between the highest income earners and the lowest income earners and it seems the rich might be getting richer and those at the bottom might be increasing too.

The Japanese government, so it seems, doesn't seem to be paying much attention to this situation other than trying to get Japanese companies to increase wages for their workers.

But the challenge with that is up to 70 percent of Japanese workers don't work for the big name-brand Japanese companies but small and midsize companies, and the small and midsize companies might not have the resources needed to pay the same wage increases as what the large companies can pay.

So this might factor in the income equality situation in Japan as there are two sets of workers, for the most part, the haves being the large company workers, and then the have nots all the other workers such as small company workers, midsize company workers, contract workers, and part-time workers, which all have wages or salaries much lower than the name-brand large Japanese company workers.

Have a nice day!