This study estimates the intertemporal elasticity of substitution (IES) of consumption in Japan, using the latest available data and considering structural changes. Our findings suggest that the IES during the post-bubble economy was greater than what it was until the end of the bubble economy. As a result of an increase in savings as a waiting option in conjunction with a precautionary savings motive, elasticity of intertemporal substitution has increased considerably since the bubble period.