According to a recent Reuters poll, household spending in Japan is expected to have grown for an eighth consecutive month during July. However, the pace of growth is forecast to have reduced considerably, pointing to worrying signs of a slowdown in domestic demand.

Economists surveyed anticipate household spending to have grown by 1.1% YoY during July 2019, down from the 2.7% growth seen in June. Japan is considering increasing its sales tax from 8% to 10% in October, and this could spur household spending in the coming months.

So far, the Japanese economy has managed to continue growing, at 1.8% in Q2 2019, driven mainly by robust domestic demand. Any slowdown in household spending and domestic consumption can weigh heavily on the economy in the coming months as it is already reeling under the fallout of the US-China trade war.