Japan Household Updated July 10, 2025.

Japan household spending up 4.7% in May, fastest pace in nearly 3 yrs

Article source:  https://mainichi.jp/english/articles/20250704/p2g/00m/0bu/007000c

Ideas

Japan's household spending might have seen a boost due to the fact that spring bonuses might have been paid before the Golden Week period.

Japanese companies usually give bonuses in the spring and at the end of the year, which conveniently helps Golden Week spending and end of the year holiday spending too.

And of course many Japanese families were waiting for the spring bonus to buy and new car some might have used it for Golden travel.

It should be remembered that the 316,085 yen is just an average and there right be some who spent more and some who might have spent much less as inflation is still a major challenge for Japanese households.

Of course the 316, 085 is not just spending on leisure items or all pleasure spending as some of it and maybe most of it might be related to spending on bills they have.

At the present time, Japan might not be significant credit card spending nation as they spend on a lot using cash but the times are changing and they too might be spending a significant amount now with credit cards.

And yes, the Daihatsu Motor Co. situation might have slowed minivehicle sales down but they might be back to normal or almost back to normal.

Daihatsu is a wholly owned subsidiary of Toyota but manufactures and produces it own type of cars.

It's interesting that Japan has maybe eight car companies but some of the lesser ones might be subsidiaries of the larger Japanese car companies such as Toyota, Honda, and Nissan.

It's interesting to note that the US only has three main car companies, excluding Tesla, but Japan has eight, which might be a point that everything in Japan is not cutthroat competition and maybe there is more cooperation that competition in the Japanese economy.

That doesn't mean all eight companies are strong companies or have excellent sales but there is something that might be working in Japan related to companies cooperating with each other.

The Japanese yen is still very strong which means Japanese travelers to overseas places might not be that many as the strong yen means Japanese travelers purchasing power is much less.

So maybe Japanese travelers might choose to travel in Japan and especially during the week long Golden Week holiday period, which is the first week of May.

Again its too early to say anything good just yet about the Japanese economy as maybe the sure in spending and travel might just be a Golden Week bump but could be back to less than good the next few months.

In the late spring period if the weather begins to get hotter and the forecast is for another hot summer of course there are going to be an increase in the buying air conditioners especially since the last few summers in Japan have seen record temperatures.

But the challenge is for the low-income and fixed income groups and the increase in energy costs over the next three or four months as the record temperatures last year lasted until the end of September.

Its possible the Japanese government might give Japanese households subsidies if the energy costs in Japan become too much like they've done in the past.

Yes, most households, even globally, spend about 30 percent of their income on food but the problem is that 30 percent is a lot more for the low-income or fixed income groups.

Most or many prices in Japan might be slowing down but the price for rice in Japan is still the major challenges as rice prices still haven't gone back to normal, as they were before the rice shortage of the summer of 2024.

Consumer spending makes up about 50 percent of Japan's GDP while in the US consumer spending is around 65 percent of GDP.

Japanese consumers usually are more savers than spenders while US consumers are more spenders than savers.

For the good of both economies if the Japanese spent more and the US saved more that might be a better option.

The average monthly income for salaried households might sound good but unfortunately Japan's average income is among the lowest of advanced economies these days when at one time in the late 1980's it was one of the highest.

Japan's economy over the past three decades has digressed and not progressed which is very sad for Japanese families.

And back in the 1980's Japan had many companies that were in the top 10 in the world. But after the 1989 asset crash everything changed and Japan has yet to really recover from that situation.

Have a nice day!

Japan Extra Budget: Updated May 17, 2025.

Japan ruling camp to craft extra budget this fall to support economy

Article source: https://mainichi.jp/english/articles/20250513/p2g/00m/0bu/021000c

Ideas

There have been many recent supplementary budgets already to try and help the Japanese economy but with little success.

With no disrespect but it seems the Japanese government doesn't or hasn't been able to do much as inflation continues to increase and Japanese households continue to have problems with it.

And then there is the possible tariff situation which potentially could hit Japanese exporters more than Japanese households but the tariffs could cause widespread harm to the overall Japanese economy.

Again it seems every new Japanese government or new Prime Minister has tried to reduce or control inflation again with very little success.

With respects to tariff relief measures most likely the Japanese government should try and help exporters to the US and help them if their sales are decreased due to decreased demand by US consumers as US consumers are going to be hit with increased prices related to tariffs on Japanese products such as cars.

Of course the had to be aware of the WTO and how they help Japanese exporters as they don't want to run afoul of WTO rules related to subsidies like what China might do sometimes.

Cutting the consumption or sales tax might be a good idea or good strategy to help Japanese households but it might increase Japan's debt to GDP ratio which is the highest in the world at this time.

If the sales tax goes from 10 percent to 8 percent which is where it was in 2019, but how much is it really going to help. How much as  2 percent decrease in the sales tax really going to help Japanese households.

Yes, Japan is very much a angering society now with social security spending maybe out of control, but its not the fault of ageing people in Japan, is a government situation that needs to be solved.

And yes, the birth rate in Japan is one of the lowest if not the lowest among all countries and the Japanese government doesn't seem to have a solution except for maybe one possible idea.

And that possible idea is to increase immigration into Japan as bringing in more workers in Japan brings in more revenue into the government which can help with social security situation and bring in more money into the Japanese government. 

Again, the same old tired ideas to try and help the Japanese economy and help Japanese households but with not much success.

The same Prime Minister and the one even before him tried the same ideas of tax cuts and cash payments but with no real success each time, or at least they considered tax cuts but in the end only used cash payments to try and help Japanese households.

The consumption tax or sales tax brings money into the government which the government needs to reduce its significant Debt To GDP ratio situation and helps with the social security problem in Japan. 

The Japanese government doesn't need to increase its spending but needs to find ways to reduce its spending in an economy that is already has the highest debt in the world.

But that is easier said than done when many Japanese households including many on fixed incomes are being challenged with high inflation rates.

The Japanese government is in a situation where whatever if does might be the wrong strategy but it might not have a choice but to increase the debt with steps needed to help Japanese households overcome the inflation situation in Japan.

Even if its 10 percent or even 8 percent as it might be too much as the sales tax while intended to help reduce the social security situation and help fund the government might be too much for some Japanese households especially those on fixed incomes or those with 2 or 3 children, or those working on limited contracts or even part-time workers scrapping by in Japan.

Have a nice day!

Japan Household Spending: Updated Nov. 10, 2024.

Japan's household spending in September down 1.1% on year

Article Source: https://mainichi.jp/english/articles/20241108/p2g/00m/0bu/024000c

Ideas:

Japanese households have been under a lot of stress since the pandemic as inflation continues in Japan with no light at the end of the tunnel in the future.

It must be very hard/difficult for the lower-income groups who have to watch every yen and have to cut back on some needed food for them or their families.

The auto/car situation has to do with the Toyota group which found out their were some discrepancies in their quality testing and shutdown some of their auto plants which might have affected sales in Japan.

The typhoon season or even the rainy season in Japan can cause a lot of problems as people don't want to go out for fear of floods and so on.

As prices continue to be high, Japanese households are cutting back on home repairs which the prices have probably skyrocketed recently, as maybe plumbers get their repair products from overseas.

And again, maybe the lower-income groups have reduced spending on everything and are just trying to make do with what they have.

The middle or upper-income groups probably didn't reduce much on food spending, but the lower-income group probably did.

As always consumers, everywhere, find substitutes if prices get too high and buying chicken instead of pork is probably one food type that consumers can easily substitute for as needed.

Most likely alcohol, beer, or even Japanese sake has become more expensive so consumers are cutting back as needed to save money.

The past summer in Japan was another record summer with higher than normal temperatures, and of course people are going to run their air conditioners to stay cool.

Obviously as the summer temperatures in Japan got hotter and hotter, consumers went out and bought summer clothes to keep themselves cool.

There used to be a phrase in Japan, during the summer called "cool summer" or something like that. It was designed as phrase to allow company employees, men, to not wear ties to the office during the summer months and companies also would reduce their use of the air conditioning systems in the buildings.

Real terms income means income, adjusted for inflation, as inflation continues to have real affect on the Japanese economy.

Household spending or consumer spending in the US, for example, as never been that strong in Japan, as the Japanese are for the most part savers and not spenders, which is the opposite of the US.

Have a nice day!

Japan Feb. Household Spending: Updated April 6, 2024.

 

Japan's Feb. household spending falls 0.5%, down for 12th month

Article Source:  https://mainichi.jp/english/articles/20240405/p2g/00m/0bu/016000c

Ideas:

Household spending, should just be a about consumer spending, and not so much about paying bills such as utility bills. But, of course, spending on utilities needs to be tracked to see how much households spend.

Of course there are positives and negatives related to household spending such as warmer temperatures in last winter might bring less utility spending but in the summer warm temperature might bring more utility spending as households increase the use of air-conditioners.

And then of course the continued inflation situation with households cutting back on some items to reduce their overall spending. So there are always positives and negatives, depending on the situation in an economy with household spending.

As the Japanese government has been implementing energy subsidies for households, maybe the subsidies are beginning to reduce overall spending on utilities in Japan too, besides a cutback on utility spending due to warmer weather and so on.

The spending on furniture and other household products, including durable goods, usually, are not daily necessity needs and might be bought once or twice a year, if at all in a year.

Stoves and heaters, as durable goods are definitely only bought once a year, if even then. How many stoves ore heaters do households need where they need to buy them every month for example.

Spending including social expenses dropped 4.8 percent, while transport and communication expenses decreased 1.1 percent, affected by a halt in production and shipping of cars following safety test rigging at Toyota Motor Corp. group firms.

Meanwhile, spending on food, which accounts for about 30 percent of household expenditures, climbed 2.0 percent, marking the first rise in 17 months, driven by an increase in dining out and purchases of beverages.

Social expenses could be anything and everything related to parties, trips, and so on, which might have been reduced due to increased inflation in Japan. 

The Toyota Motor group, the largest car maker in Japan, has had some challenges recently due to quality control challenges and had to reduce production for a few weeks to get things sorted out, including one of its subsidiaries, the Daihatsu company.

Food, for the most part, has always been a major expense for most households globally, and for the lower-income groups, the percentage related to food might be higher than 30 percent.

Of course as the weather begins to improve, and the Hanami season begins, maybe more people are out and about and going to restaurants more this spring.

But at the same time, despite the beginning of the Hanami season, maybe inflation is reducing some activities of some people and maybe they are not taking long trips and or going to hotels, and or eating out as much as before the pandemic or before inflation hit the Japanese economy. 

Private consumption in Japan might be more than half of Japan's GDP, but it seems that consumer spending is never where it should be in Japan for several reasons.

For one, maybe, as many Japanese workers haven't received a pay raise in many years, that has reduced consumer spending in the economy.

Second, is the ideas that Japan has begun an aged society and older workers, especially those on fixed incomes, tend to spend less.

Third, which might be related to the first idea, is more and more young Japanese workers are contract or even part-time workers, who might spend less due to their anxiety about a good job and or a good salary.

And fourth, is for the most part, Japanese overall are more savers than spenders such as those in the US who are, for the most part, more spenders and not savers.

And then there is the psychological mindset, meaning as consumers/households are constantly bombarded with not so good news about the Japanese economy, it become a self-fulfilling prophecy which leads to less spending in the Japanese economy. 

Have a nice day and be safe!

Japan Household Budget Challenges: Updated March 3, 2024.

 

Japan household budget burdens to rise by $200 per person in 2024: estimate

Article Source: https://mainichi.jp/english/articles/20231230/p2a/00m/0bu/025000c

Ideas:

Maybe spread out for a year $200 might not be that much, but then again, for some Japanese households it might be too much with the continued inflation situation.

Real wages like the real economy is what is relevant for the average Japanese household, as GDP, record high stock market might not mean anything to the average Japanese.

But then again, inflation and budget concerns are very much individual from household to household, and of course it depends on how each household spends and how much are their costs related to energy, grocery shopping and so on.

The flat tax cut sounds good, but is each household going to get the tax cut in cash of is it just a tax cut in the taxes each person or household usually pays?

A cash handout of 40,000 yen would be good, but if each household could get it the cash and then they could use how the think is best.

Inflation slowing from 3.1% to2.4% might not even be noticeable for most households as maybe don't follow or think about how much inflation really is but in real terms, how much they have to pay related to food purchases and energy payments, then yes then they see it going up and maybe down in 2024.

The Japanese government should keep the energy subsidies through 2024, along with the tax cut and handout to low-income families as a way to really insure that inflation is finally lowered.

And of course, if wage increases are significant enough in April 2024, which might mean consumer demand and consumer spending might get back to some kind of normal.

But all companies need to increase wages and not just large companies, but small and midsize companies too need to do what they can.

Price controls are good, for example on daily necessities such as milk, eggs, flour, but can't be used for very a long time as they disrupt the normal flow of a market economy.

Japan is a resource-poor country and has to import much of what it needs, and of course is subject to global prices and then the variance between the US key rate and the Japan key rate has made the Japanese yen very weak, which means import prices are very high in Japan.

Even though the US hasn't increase its rate for three consecutive meetings, the variance is still very high at this time.

The Bank of Japan might be signaling it might begin to think about how to change it ultra-low policy, but as we move into 2024, the news is the Japanese economy has slipped into another recession, which could affect what the Bank of Japan is going to do about its low rate policy.

There are a lot of "ifs" related to this paragraph as anything can happen. For example the July-Sept. quarter was negative growth for Japan, and many were saying that Oct.- Dec. would see improved growth, but the opposite has actually happened as the Oct-Dec. quarter was negative growth too, which meant the Japanese economy has slipped back into a recession.

The Japanese yen, might become stronger, but at the same time, the Japanese economy might still be in a not so good place with it not growing.

And then there is the idea of the weak yen bringing in more foreign tourists and the weak yen, improve their purchasing power.

If the weak yen gets stronger, which is good for the domestic economy, the Bank of Japan has to decide what is best overall of the economy, a weak yen which helps exporters and foreign tourists or a strong yen which helps the domestic economy and importers. Maybe something in the middle that helps everyone.

Have a nice day and be safe!

Editorial: Ideas Later: Update Jan. 8, 2024.

 

Editorial: Reckless spending by Japan gov't won't dispel public's price hike anxieties

Article Source: https://mainichi.jp/english/articles/20231103/p2a/00m/0op/015000c

Article:

Living conditions in Japan are becoming increasingly worse due to continuing price hikes for food products and other commodities. Though the government on Nov. 2 decided to spend up to 17 trillion yen (about $113 billion) on economic measures, it won't be able to dispel people's anxieties over rising prices by splurging, and not using the money effectively.

The "Engel's coefficient," or the rate of spending on food in overall household expenditure, has sharply risen in Japan, with the average hitting the 27%-level from January to August this year -- the highest in about 40 years not including the period when COVID-19 was rampant. The figure exceeds 30% among low-income households, and support for these people is an urgent need.

Ideas:

Even in the US, despite inflation going down significantly, people, consumers, still don't feel that good about the economy and living conditions.

Usually among lower-income groups, they spend more on food, per capita, than the upper income groups.

The problem, might be, that Japan, and consumers, have gotten used to low prices and deflation, and still are not used to the increased inflation and price increases. It might take some time before the deflation mindset decreases.

While the extra budget is good and needed, its doubtful it will dispel people's anxieties and inflation has continued in Japan for several years, and a one time cash handout and a tax cut might give some needed temporary relief, it might not help in the long run.

Article:

Nevertheless, Prime Minister Fumio Kishida proposed an income tax cut that would extend benefits to high-income earners. This seems to be an attempt by Kishida to eradicate the impression of the government implementing tax hikes, but the role of supporting people's lives has been diluted.

Regarding the purpose of the tax cut, Kishida explained, "With the cooperation of the public and private sectors, there are positive signs of wage hikes. The goal is to completely break free from deflation." However, many companies have been forced to increase wages to cope with price hikes, rather than due to policy effects.

Ideas:

It seems like, maybe yes, maybe no, the tax cut is a political move due to the Kishida cabinet having low favorable ratings. But yes, it good for Japanese consumers if they can actually get the tax cut with not a lot paperwork.

Being able to "completely breaking from deflation" might take more than one tax cut and more than one cash handout as deflation, after decades, seems to be entrenched in the Japanese economy. Its a very complicated challenge and may take some time.

Wage hikes are important but the challenge is when companies increase wages, the same companies might then increase prices to pay for the wage increases.

And, again, as mentioned before in other commentaries, 70 percent of the Japanese workforce works for small and midsize companies, that didn't get a wage increase in April of 2023, and there is nothing that says they will get a wage increase in April of 2024.

Article:

Tackling economic inequality set forth in Kishida's signature policy "new capitalism" virtually remains untouched. The government has merely repeated makeshift responses, such as subsidizing gasoline prices. Even with multiple ad hoc policies, the path to improving people's lives is nowhere to be seen.

It is also questionable that a large number of public work projects has been included in the name of building national resilience. This could spur higher material costs and lead to a further surge in commodity prices.

Ideas:

In 2021, when Kishida became the new prime minister the term "new capitalism" came up but to be honest, its not clear exactly what it means. But yes, its good if  it means reducing income inequality in the Japanese economy. 

Most people think Japan is this "rich" country, but that is far from the truth. As Japan's per capita income is low among advanced economies.

In the past, the Japanese economy, was built largely on public works projects, and many of them, useless project, which were used by politicians to help their constituents. At the same time Japan's debt to  GPD has increased to the point that its now one of the highest among advanced economies.

Improving peoples lives might be a relative term, as maybe some groups, yes, are struggling and maybe some groups are not struggling with inflation as it is. This doesn't mean all are OK or all are not OK, but inflation is an individual situation, depending on what you buy and don't buy and what your home required expenses are such as energy costs and rent etc.

Article:

Although the government plans to make massive investments in funds supporting private businesses, this will unlikely lead to an improvement in people's lives. The economic measures are also said to provide a long-term boost to areas with growth potential, such as the strengthening of semiconductor production and the development of space-related technologies. However, there are many funds that lack transparency and are not being used effectively.

The government still has no self-restraint regarding fiscal discipline. It will withdraw money from the reserve fund of 5 trillion yen (roughly $33.3 billion), which can be used without deliberation by the Diet, to use for these economic measures. It is clear that the reserve fund is being used outside of its original purpose of preparing for natural disasters and has become a convenient money source for the administration.

Ideas:

Once again, up to 70 percent of the Japanese workforce works for small and midsize companies, which seem to have been left out, as usual, of any Japanese government support. 

But that is with many economies, that seem to support large companies but not small companies the same.

It doubtful that investments in semiconductors or space-related technologies is going to boost the sentiment of consumers or provide a boost to everyone in the Japanese economy, other than the geographic areas where semiconductor factories will be built.

As far as using funds other than where they were/are intended, seems to be rampant in most advanced economies, as they use it when they need it. Its like regular households, and what the intentions are related to savings and spending. A household might intent to same a certain amount, but an emergency or something comes up, they will use the savings as needed, And the same with governments and spending

Article:

Further issuing government bonds seems inevitable. The country has been spoiled by the Bank of Japan's extraordinary low interest rate policy and carries a debt of over 1,000 trillion yen ($6.65 trillion), but the monetary policy has been revised and interest rates are on an upward trend. The burden of interest payments could weigh heavily on Japan.

Future generations may have to pay for the worsening situation. If the government continues its reckless fiscal spending in order to boost its popularity amid a slump in its approval ratings, it can only be described as extremely irresponsible.

Ideas:

The ultralow monetary policy has been a positive and a negative for the Japanese economy. Yes, the Japanese government debt to GDP ratio is among the highest of advanced economies, but most of the debt is owned internally and not externally, which was not the case of Greece in 2010, which had more external debt to internal debt.

As a result, no other country is going to call in the debt, which is always a chance with the US debt, which owes a lot of bonds to other countries such as Japan and China. But for Japan, Japan owns its own debt and the Bank of Japan will just roll them over and issue new bonds to keep the government and economy going.

Again, Greece is a perfect example of too much debt. In 2010, Greece went to the EU central bank to get more funds to keep the government operating. But the EU said no, unless you provide us a new budget that shows how you are going to reduce your debt. 

It took several years of negotiations and finally they submitted a budget that was approved and the EU gave them the needed funds to keep operating the budget.

But what happened was almost a tragedy, as the Greece government reduced the pensions of senior citizens in Greece as a way to reduce the debt.

Unfortunately, this is a situation, years down the road, that could play out in Japan too.

Have a nice day and be safe!

Japan Economic Package: Update Jan. 6, 2024.

 

Japan OKs over $113 billion economic package to ease inflation shock

Article Source: https://mainichi.jp/english/articles/20231102/p2g/00m/0na/038000c

Ideas:

Its rare that a proposed economic package, which first introduced, remains mostly the same when it finally approved. But it seem to tax cut of 40,000 yen per person and the 70,000 yen payouts for low-income households was able to keep the same numbers without losing its intended value.

It sounds very good but can a one-off tax cut really improve the Japanese economy? Of course even the Japanese government has budget constraints and maybe 40,000 tax cut was the limit that the Japanese government could afford at this point.

Of course the main question is how is the Japanese government going to pay for the tax cuts and the payouts, when the Japanese government has one of the highest debt to GDP ratio among advanced nations.

While the tax cut and payout are the first step to maybe "completely break with deflation" its going take much more for the Japanese economy to grow significantly.

The mindset of companies and households need to change from a deflationary mindset to one of improved growth through wage increases and more consumer spending in the Japanese economy, and that is not going to happen in one quarter or even half a year, as it could take much longer to get consumers spending significantly and companies, all companies, to increase wages.

At the same time, price hikes will continue in 2024 until, all companies, finally begin to increase wages. But the challenge is, as companies pass-on their costs to the next in the supply chain, those same companies that just increased wages, now might have to pass-on the wage increases to the next in the supply chain, including the final retail customer.

The Japanese government is already one of the biggest government spenders among advanced economies, and an extra supplementary budget is no surprise here.

And as always, anytime there is faltering public support, government will find ways to try and improve the public support, and in this case returning tax revenues might help with many households, but at the same time might not improve public support.

Also, opposition party lawmakers, like everywhere in the world, will find fault with the current proposals and might come up with their own ideas related to tax cuts and one-time payouts and also mentioning the time need to pass-on extra tax revenue.

The challenge, once all of the tax cuts and payouts are finalized and finally able to go to the Japanese public, the Japanese government needs to makes sure access is easy and doesn't require a lot of un-needed paper work for households or individuals to get what the Japanese government wants to give them.

At the same time, the Japanese government needs to make sure that schemers take advantage of the Japanese government with cheating or other means to cheat the government.

Rarely, once spending increases, do governments reduce outlays, as most of the time spending gets higher and higher. And Japan is no exception, as it will be challenged to actually cut spending back to the pre-crisis level.

It might take more than one tax cut and or more than a one-time payout for household consumer sentiment to improve, and the long-established deflationary mindset has been entrenched in the Japanese economy for over a decade.

The Japanese economy might only grow 1 percent, but that is better than nothing, and its  a start, its a platform for better growth in the future.

And at the same, tax incentives and regulatory reforms are much needed in the Japanese economy along with helping small and mid-size firms with helping them increase wages.

For too long, like many advanced economies, many of the benefits go to large companies and the small and mid-size companies get left out.

More than 70 percent of the Japanese workforce works for small and mid-size companies. The challenge is if the government doesn't find ways to help the small and midsize companies Japan its going to have a two-tiered wage system based on haves and have-nots as many small and mid-size companies can't afford to give wages hikes.

That is the problem now in South Korea, as the variance for  wages and benefits for large  companies and small companies is so large that many university graduates don't want to work at small and midsize companies.

While "the new frontiers" of growth sounds good, will they really improve the daily lives of households and or individuals in the Japanese economy?

Yes, the Japanese economy needs to economic drivers, beyond exports, but what the Japanese economy really needs is improved productivity per capita, as it has one of the lowest per capita labor productivities among advanced economies.

Japan also needs new innovation drivers, but sometime old established traditional companies are slow to change in Japan.

Private consumption or consumer spending might be resilient at this time, but inflation might eat away at consumer sentiment, and households and individuals will get tired and reduce their spending.

Prime Minster Kishida can only do so much, with suggesting and asking companies to increase wages but in the end companies will decide what is right for them and when to increase wages.

Wage increases might have been 3.58 percent, for large companies, but again, 70 percent of the Japanese workforce might not have received a wage increase in April 2023, as most don't work for large companies, but small and mid-size companies.

Inflation is expected to continue in 2024 for companies and might need to increase wages more than the 3.58 percent of 2023. If not real wages, again, will be outpaced by inflation, which means, again, households are going to be stressed even more from inflation.

Have a nice day and be safe!