Japan’s real consumption expenditure for households with two or more people fell 3.1% year-on-year in August, the Statistics Bureau said in its release on 9 October. Average monthly expenditure was ¥310,975, down 1.0% in nominal terms. The distinction between real and nominal spending matters because pricePriceThe most recent agreement between a buyer and a seller. It is not a prediction; it is the market’s latest handshake.Read More changes can mask changes in purchasing power. The data describe August activity, not spending during October.

Japan’s real household spending fell 3.1% year-on-year in August, marking the ninth consecutive monthly decline, although the drop was smaller than expected. Persistent inflationInflationA broad rise in prices that reduces money’s purchasing power. Central banks watch inflation because it affects interest-rate decisions.Read More continued to weigh on consumers, raising concerns about domestic demandDemandHow much buyers want at a given price. Stronger demand can make buyers compete with higher offers.Read More as the Bank of Japan considers further interest-rate increases.