And that has the country's economy shrinking faster than people thought.
Revised GDP figures out Friday showed the economy contracting 2.9% between July and September.
That was worse than market forecasts and the first estimate of 2.1%.
The downturn came as consumers and businesses both cut outlays.
Separate data showed real wages and household spending both falling again in October.
Rising inflation looks partly to blame, with shoppers seeing more of their income eaten up by everyday life.
The numbers add to the headache for the Bank of Japan as it weighs up how to exit from negative interest rates.
So far, the bank has refused to budge, saying it wants to see signs of sustained wage hikes.
This week, governor Kazuo Ueda said next year's data on pay rises would be critical to making a decision.
The October data shows salaries rising 1.5%.
But with inflation at over 3%, that's still a pay cut in real terms.
Traders bet the BoJ will have to move on rates soon even so, with the prospect sending the yen higher.
On Friday morning, the Japanese currency was on track for its biggest weekly gain versus the dollar in five months.
That sent the Nikkei stock index the other way, down close to 2%.
Shares in big exporters tumbled on concern the stronger yen will hit their overseas sales.
