Japanese real household spending increased 1.7% MoM (vs 1.3% MoM expected) in July, rebounding after a -5.2% MoM decline in June. On an annual basis, spending was up 1.4% YoY (vs 2.3% YoY expected), slightly higher than 1.3% YoY previously.

• Real incomes dropped -2.5% YoY in July, a deeper decline than -1.7% YoY in June and the weakest since February 2024. Real disposable income was down -4.9% YoY, maintaining a weak trend in incomes.
• Goods spending growth improved from 1.6% YoY to 3.1% YoY, while services spending growth slowed from 2.3% YoY to 1.1% YoY.
• Durable goods spending was still much higher than last year, up 26.6% YoY, while semi-durable and non-durable spending growth rates were flat or down at -2.3% YoY and 0.1% YoY, respectively.