Japan's spot electricity prices have fallen to their lowest level since early July, driven by forecasts of cooler weather and reduced demand from a Tuesday public holiday and upcoming summer vacations later this month.

Data from the Japan Electric Power Exchange shows that the nation's day-ahead power price for the next day dropped 41% on Monday to 11.37 yen per kilowatt-hour. The Japan Meteorological Agency and commercial weather forecaster Vaisala predict mild temperatures for Tokyo and the broader Kanto-Koshin region from this weekend into early next week, with temperatures slightly below the seasonal average.

The Japan Meteorological Agency forecasts daytime highs in Tokyo of 28-30 degrees Celsius through Sunday. The Kansai region is also expected to experience a brief cooling period in the coming days.

Major manufacturers such as Honda and Nissan will suspend production due to the start of summer holidays on August 8, as well as disruptions to parts supply caused by the Kumamoto earthquake. Japan's Obon summer holiday period typically falls in mid-August.