TOKYO, May 10 — Japan’s household spending dipped 2.3 per cent in March from a year earlier as the cost of fuel and other items surge, though the fall was smaller than expected.

The decline was the first since December and due in part to the comparison with a sharp rise in spending a year earlier.

The decline was smaller than the market consensus of a 3.2 per cent drop and comes after a 1.1 per cent rise in February and a 6.9 per cent surge in January.

Analysts have warned that the pace of nominal wage increases in Japan is unlikely to track rising prices, dampening spending appetites.

In March, core consumer prices rose 0.8 per cent — the fastest increase in more than two years — as oil prices soared.

Excluding energy, however, prices were down 0.7 per cent.

Some manufacturers and stores in Japan who rely on imported resources have begun to raise prices.

Last month, the Bank of Japan left its ultra-loose monetary policy unchanged, while hiking its full-year inflation forecast.

The central bank cautioned that it sees rising prices, driven by a surge in commodity costs caused by the Ukraine war, as a temporary and volatile trend.

And even the current consumer price rise still falls far short of the Bank of Japan’s long-term goal of two per cent inflation. — AFP