Japan's household spending dropped 3.3% yoy in June 2026, deepening from a 0.4% decline in the prior month and defying market expectations for a 1.0% increase. It marked the seventh straight month of contraction and the sharpest decline in the current sequence, underscoring persistent weakness in consumer demand. On a seasonally adjusted monthly basis, household expenditure slipped 6.4%, reversing a 3.7% gain in May and far exceeding forecasts for a 3.1% decrease. The reading was the first monthly fall since March and the steepest drop since January 2021.