East Asia Econ

Japan – will consumption ever grow again?

The population peaked in 2010, and aggregate consumption stopped growing shortly thereafter. With the number of people now set to decline on a continuous basis, can consumption – and thus the broader economy – ever grow again?

Paul Cavey

Aug 20, 2025 • 8 min read

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East Asia Today

Aside from Trump-Xi, the big event today was the BOJ meeting, though that was much more about continuity than change. In terms of data, Japan released trade data for the first 10 days of October. Korea's JOLTS data for September were weaker than the earlier labour market data had suggested likely.

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East Asia Today

Lots of sentiment surveys to discuss today: business confidence in Korea (better), consumer confidence in Japan (also better, even though inflation expectations remain high) and Q3 economy-wide surveys for China. Also, some details of China's 15th FYP, with some encouraging language on consumption.

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China – shifts in financing, but not quite what is wanted

The PBC's quarterly surveys cover firms and banks too, but I think the household version is most interesting. In Q3, household sentiment is weak, but mixed. Price expectations are very soft. Some of the savings data support the idea that China's economy is near a structural turning point.