Japanese Household Spending July:

-3.6% y/y, biggest drop since January 2024

• expected -1.6% ,prior -3.3%

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September BOJ hike is near-fully priced (~87%), driven mainly by rising inflation and yields, not consumption strength. Weak household spending is a known, ongoing theme, not new information, and doesn’t touch the inflation and yen-weakness arguments actually driving the hike case. The BOJ is tightening despite soft spending, not because of strong spending.

This article was written by Eamonn Sheridan at investinglive.com.