Retail sales unexpectedly declined in December, indicating weakness in consumer spending as the central bank began a two-day meeting Thursday to decide whether to boost monetary stimulus.
The drop adds to concerns that price gains in Japan will remain insufficient to spur economic growth, with data due Friday that is forecast to show inflation barely above zero. Turmoil in global financial markets and the yen's recent strength add to pressure on the Bank of Japan to consider a policy adjustment to spur price increases.
Sales fell 0.2 percent from a month earlier, better than the 2.5 percent slump in November but still short of forecasts for an increase of 1 percent. From a year earlier, sales dropped 1.1 percent in December.