Household spending slumped unexpectedly in April and consumer inflation came in roughly flat, casting doubt on the central bank's view that a steady economic recovery will help move inflation toward its ambitious 2 percent target.
Households spent less on leisure and dining out even as the jobless rate fell to a 18-year low, underscoring the challenge of eradicating the sticky "deflationary mindset" that has beset Japan for nearly two decades.
While analysts expect consumption to pick up in coming months, lingering weakness will keep policymakers under pressure to underpin a fragile economic recovery.