Comment on Japan posts lacklustre household spending, inflation

Tokyo (AFP) - Japanese household spending unexpectedly fell in April while inflation and factory output were also lacklustre, a string of official data showed Friday, aggravating concerns about the world's third-largest economy.The figures come as economists warn Japan could see a weak second quarter, following a better-than-expected 0.6 percent expansion -- or 2.4 percent at an annualised rate -- during the first three months of the year.Household spending remains stubbornly weak as the Bank of Japan struggles to boost prices in a bid to end decades of deflation for good and kickstart the long-lumbering economy.Despite wage rises at big firms and a tighter labour market, convincing people to splash out on consumer goods has been a struggle after Japan raised sales taxes last year to help pay down a huge national debt.The rise hammered consumer spending and pushed the economy into a brief recession.On Friday, the internal affairs ministry said household spending -- a broad measure of private consumption -- fell 1.3 percent from a year ago, the 13th consecutive month fall.The drop was a surprise given market expectations that spending would turn up for the first time since Tokyo raised the sales levy in April 2014."Consumption has not recovered to the levels before the tax rise," said Takeshi Minami, chief economist at Norinchukin Research Institute."With the labour force decreasing, there should be upward pressure on wages and then inflation if the economy grows."Japan is now standing at a crossroads as to whether this cycle starts or not."Core inflation, excluding volatile fresh food prices, hit 0.3 percent on-year, beating market expectations for a 0.2 percent rise but still way off the Bank of Japan's 2.0 percent target.