Japan’s spending dips amid worries over surging prices

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.