Japan's household spending in April fell at the fastest rate in three years in a sign that consumption could be slow to recover from an increase in the nationwide sales tax, raising questions over the pace of economic recovery.
Industrial production fell more than expected in April as companies cut output to avoid a pile-up in inventories in the lull after the sales tax hike took effect.
BOJ officials have repeatedly said they are confident spending will quickly recover as the labour market remains tight, but the bigger-than-expected spending drop in April and a slowdown in factory activity could raise the stakes for monetary policy.
Japanese household spending fell 4.6% in April from a year ago, more than the median market forecast for a 3.2% annual decline. That marked the fastest annual decline since March 2011, when an exceptionally powerful earthquake triggered a nuclear disaster.
