The Ministry of Internal Affairs and Communications announced on Tuesday that the Japanese household spending increased 0.7 percent y-o-y in July, following a 5.1 percent y-o-y drop in June.

Economists had expected household spending to rise 2.9 percent y-o-y in July.

According to the report, spending increased for transportation & communication (+14.2 percent y-o-y), apparel (+2.7 percent y-o-y), food (+1.9 percent y-o-y), and culture & recreation (+1.7 percent y-o-y), but reduced for education (-9.9 percent y-o-y), furniture & household utensils (-8.4 percent y-o-y), medical care (-7.0 percent y-o-y), utilities (-5.9 percent y-o-y), and housing (-1.7 percent y-o-y).

In m-o-m terms, household spending fell 0.9 percent in July after a 3.2 percent drop in June. Economists had predicted a 1.1 percent m-o-m gain in the Japanese household spending for July.