Japan's household spending rose in January, but the business mood sank in the first quarter as rising raw material costs squeezed corporate margins, leaving the country's resource-poor economy facing a hard grind ahead.

The results add pressure on policymakers to ramp up fiscal stimulus to support Japan's economy, which is likely to have stalled in the current quarter and faces fresh risks from soaring fuel prices blamed on the Ukraine crisis.

"While infection numbers are gradually falling, service consumption hasn't fully resumed. This heightens the chance Japan's economy contracted in January-March," said Takeshi Minami, chief economist at Norinchukin Research Institute.