Major factors influencing consumer purchasing decisions in Japan 2023

Financial aspects were major factors influencing the spending decisions of Japanese households. As revealed in a survey conducted in December 2023, over 67 percent of respondents stated that future development in prices were factors that their households would take into consideration when making spending decisions in the following year. Changes in household members’ income followed as the second commonly named reason, with almost 51 percent of respondents. 

Saving and spending in Japanese households

Since the burst of the economic bubble and the economic downturn in the 1990s, saving for uncertain future conditions has been impacting spending behavior in Japan. While the stable economy and the broadening of financial services encouraged consumption, the coronavirus pandemic curbed the spending mood as the household saving ratio reached a decade-high. Reflecting this trend, final household expenditure declined as consumers held back expenses on durable goods and services, before recovering again in 2022. 

Price developments in Japan

Due to the reliance of Japanese industries on imported fuels and feed, commodity prices of consumer goods are tied to global market developments and the performance of the Japanese currency. Particularly non-durables like agricultural produce and daily necessities are heavily impacted by fluctuating energy and animal feed costs. While the Bank of Japan tries to keep prices low and businesses are hesitant to increase prices at the cost of customer loyalty, consumers were in agreement that prices will continue to rise in the future.