Japan's spot electricity price drops to the lowest level since early July as cooler temperatures and holidays reduce electricity demand

(1) The spot electricity price in Japan dropped by 41% on Monday to 11.37 yen/kWh, marking its lowest level since early July. The decline was driven by forecasts of cooler temperatures, a statutory holiday on Tuesday, and upcoming summer holidays later this month, collectively reducing electricity demand.(2) According to the Japan Meteorological Agency and commercial weather company Vaisala, temperatures in Tokyo and the Kanto-Koshin region will become mild from this weekend through early next week, slightly below the average for this time of year. Tokyo's daytime highs are expected to be 28-30°C, and the Kansai region will also experience a brief cooldown.(3) On the demand side, major manufacturers including Honda and Nissan have begun production stoppages due to the summer vacation starting August 8, as well as supply chain disruptions caused by the Kumamoto earthquake.(4) Japan's Obon summer holiday, usually concentrated in mid-August, will further reduce electricity load due to holiday factors.