Real household spending in Japan jumped 4.6% MoM (vs 0.4% MoM expected) and is now up 4.7% YoY in May, up from -0.1% YoY in April and the largest annual gain since August 2022.

• Real income growth was still weak at just 0.4% YoY, but it was the highest since December 2024. Real disposable income growth saw a healthier gain of 2.6% YoY, up from 0.9% YoY previously.
• Spending on both goods and services was strong in May, up 6.5% YoY and 4.6% YoY, respectively. Goods spending growth was the strongest in over three years.
• Transportation & communications spending surged 25.3% YoY, leading to durable goods spending being up 63.1% YoY.