Light leakage in in-plane-switching liquid crystal displays (IPS LCDs) has been examined by image analysis and photon correlation measurement under a microscope. Static light leakage could be decomposed into a temperature-insensitive uniform part and a temperature-sensitive localized part. Nematic fluctuation effects in IPS LCDs are quantitatively clarified as follows. High-speed camera observation shows that dynamic fluctuation movements in a nematic layer modulate pixel images with static light leakage. The fluctuation level in the camera image is about 20% of the mean. However, spatial averaging over LCD pixel size suppresses fluctuation level into 3–5%. This result coincides with the photon correlation measurement results.