Japan economic perspective (regular report): Consumer spending update (May 2026)

Research evidence excerpt

Japan economic perspective (regular report): Consumer spending update (May 2026)

Global Markets Research

Japan economic perspective (regular report) 9 July 2026

EQUITY: JAPAN STRATEGY

Research Analysts

Consumer spending update (May 2026) Macro strategy

Kohei Okazaki - NSC

kohei.okazaki@nomura.com

Seven reasons for the sharp acceleration in consumer spending +81 3 6703 1255

• Real consumer spending could be very strong in Apr–Jun

• Benefits from so-called 2027 problem for air conditioners, tax breaks for

passenger vehicles, and economic stimulus measures including handouts

• Clear rise in per capita real wages a sustained tailwind for consumer spending

Consumer spending in Apr–Jun could accelerate at a pace equivalent to 6–9

months' worth under normal circumstances

The recovery in consumer spending has reached a notable level. Monthly indicators of

macro-level consumer spending have been increasingly showing a recovery (Figure1).

The Total Consumption Trend Index (CTI macro) for Apr–May was up 0.5% from the Jan–

Mar average, and the Consumption Activity Index was up 1.1% (all figures adjusted for

inflation). We think these indicate substantial acceleration. Given that GDP-basis (real)

consumer spending normally rises by 0.1–0.2% q-q, we think growth in Apr–Jun could be

equivalent to 6–9 months' worth of growth in spending.

Seven reasons for brisk consumer spending

We identify at least seven factors behind the brisk consumer spending.

A. Shift to positive growth in per capita real wages

B. Policy measures have kept a lid on rises in energy prices

C. The wealth effect of the buoyant equity markets

D. The impact of the cash handouts in the FY25 economic stimulus package (special

grants-in-aid for regional revitalization)

E.