TOKYO — Japanese households reduced spending for the third consecutive month in February, despite a slight uptick in real wages, according to government data released Friday. The unexpected dip in consumption highlights persistent economic fragility amid rising living costs and cautious consumer sentiment.
The Ministry of Internal Affairs reported a 0.5% year-on-year decline in household spending, contradicting analyst expectations of stabilization. This comes as real wages edged up 0.2% — the first increase in nearly two years — suggesting workers remain hesitant to spend even with marginally improved purchasing power.
“The disconnect between wages and spending reflects deep-seated uncertainty,” said a senior economist at a major Tokyo research institute who requested anonymity to speak candidly. “After decades of deflationary mindset, households prioritize savings over consumption at the first sign of economic headwinds.”
Officials at the Bank of Japan have closely monitored these trends as they consider further adjustments to the country’s ultra-loose monetary policy. Private sector analysts note the spending slump could delay anticipated interest rate hikes.
Market observers warn this consumption weakness may undermine Japan’s fragile economic recovery, with ripple effects across Asian export markets. The government is reportedly considering additional stimulus measures ahead of critical wage negotiations this spring.