Japan's Household Spending Sees Four Consecutive Months of Growth - Driven by Travel and Transportation, Is the Economic Recovery Genuine?

1) What Happened: Reading "August +2.3%" in Numbers

In August 2025, real household consumption increased by +2.3% compared to the same month last year. This marks the fourth consecutive month of positive growth, surpassing market expectations of +1.2%. Even with seasonal adjustments, there was a +0.6% increase from the previous month, confirming an upward trend on a monthly basis as well. The growth was driven by the travel and transportation sectors, with some contribution from pent-up demand since the same month last year, indicating a shift towards more outward activities.Investing.com

As a supplement, Japanese media's breaking news also confirms "real +2.3%" and "four consecutive months of positive growth" (313,977 yen per household). The numbers match, ensuring high consistency as breaking news.Kumanichi Electronic Edition | Kumamoto Nichinichi Shimbun

2) Quality of Recovery: Broadening or Patchy?

The recent increase paints a picture of "experience" consumption recovering with the resumption of tourism and travel. The rebound in service consumption partially compensates for the weakness in goods consumption, which tends to be pressured by prices. Meanwhile, with prolonged high prices, a preference for "saving while selectively traveling" is becoming established. While the "quantity" of consumption is recovering, there is a high possibility of a shift in "quality" (from durable goods to experiences and nearby activities). The primary report that this article is based on also indicates the contribution of travel and transportation.Investing.com

3) Implications for Macro: BOJ, Exchange Rates, and Stocks

The resilience of consumption is a positive factor for the Bank of Japan in evaluating the "virtuous cycle of wages and prices." The policy decision in October will depend on the external environment, but recent statements suggest a stance of "not hesitating to raise rates if conditions are met." Caution towards global uncertainties (such as the U.S. economy and trade conditions) has also been expressed, with the current yen exchange rate and inflation outlook being key factors.Reuters

4) Lived Experience: The Path of Confidence

In terms of household sentiment, the Consumer Confidence Index (CCI) rose from 34.9 in August to 35.3 in September. Employment and living conditions have also gradually improved, signaling a psychological turning point of "having passed the worst phase." However, the index level remains low and has not yet reached pre-COVID confidence levels.ESRI Japan

5) Social Media Reactions (Summary)

The editorial team summarized and anonymized posting trends from X (formerly Twitter) and major portal comment sections (typical examples):

• "I can go on trips and to live events again. Transportation costs are high, but I still want to move around" (Experience-oriented group)

• "Even if the numbers are positive, with continuous price hikes, it doesn't feel 'easier.' Going out while saving" (Realization of high prices)

• "If wage increases spread, more can be spent on dining out and leisure. The raise in the minimum wage is also appreciated" (Wage-focused)Reuters

• "Some people's wallets loosen due to the wealth effect of rising stocks. However, it doesn't affect everyone" (Expectations and limits of the wealth effect)Reuters

• "In rural areas, transportation costs hit household budgets hard. Is the excitement skewed towards urban areas?" (Pointing out regional differences)

※The above is not a quote from individual posts but a "summary" of visible points.

6) Investor Perspective: Three Checkpoints

1. Trends in nominal and real wages from October onwards

2. Trends in energy and food prices and exchange rates (the course of yen depreciation)

3. Sustainability of service consumption (continuity of travel, transportation, and dining out)

If these remain steady, the scenario of "gradual recovery" in private consumption towards the end of the year will become dominant. Conversely, external shocks or a further depreciation of the yen leading to a resurgence in import prices pose a risk of squeezing real income and cutting into recovery.

7) Fact Sheet (Quick Reference)

• Real Household Consumption (Households with Two or More People): August +2.3% y/y, fourth consecutive month of increase. Exceeds market expectations of +1.2%.Investing.com

• Month-on-Month (Seasonally Adjusted): +0.6%.Investing.com

• Leading Sectors: Travel and Transportation (Contribution from Pent-up Demand).Investing.com

• Breaking News Confirmation (Japanese Media): Real +2.3%, 313,977 yen per household.Kumanichi Electronic Edition | Kumamoto Nichinichi Shimbun

• Consumer Confidence Index (CCI): August 34.9 → September 35.3.ESRI Japan
  
  

※Note: Some reports mention the relationship between political movements and consumption/market, but currently, the focus is on the improvement of household consumption itself. Due to differences in interpretation of political factors among companies, this article prioritizes the reliability of economic data.Investing.com