TOKYO ― Japanese household spending unexpectedly fell in May as higher prices continued to squeeze consumers' purchasing power, data showed on Friday, complicating the central bank's decision on how soon to raise interest rates.Many analysts expect consumption to rebound in coming months as big wage hikes offered by companies and a tax break aimed at cushioning the blow from rising living costs reach households.
The soft reading comes in the wake of an unexpected downward revision to Japan's first-quarter gross domestic product and a slew of surveys showing worsening consumer sentiment.Sluggish private consumption is a source of concern for policymakers striving to achieve sustained economic growth underpinned by solid wages and durable inflation, which are prerequisites for normalizing monetary policy.