Though sentiment among merchants rose to a four-month high in March, the gains may not last as they expect conditions to deteriorate in coming months.
The Economy Watchers index, a survey of barbers, cabbies and others who deal with consumers, rose to 36.9 from 33.6 in February, the Cabinet Office said Tuesday. The outlook index of conditions in two to three months fell to 38.2.
Consumer confidence is at a five-year low as households struggle to pay for food and energy costs that are rising faster than wages. Sentiment among the largest manufacturers fell to a four-year low in March, a quarterly Bank of Japan survey showed last week.