Japan’s households have boosted spending by the most in 10 months despite inflation and falling real wages, signaling some resilience in the economy.

Outlays rose 2.7% in January from the previous month, led by increases in transportation, communication and entertainment, the internal affairs ministry reported Friday. Outlays declined a touch more than forecast compared to a year ago.

Friday’s data indicates there was a rebound in consumer confidence at the start of this year despite concerns about higher prices in fuel and daily necessities. The nationwide core inflation sped up beyond 4% in January, doubling the Bank of Japan’s 2% price goal. The solid consumption data could fuel market speculation that the central bank may consider moving toward policy normalization.

"People are becoming more active, including showing strong travel demand,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui DS Asset Management. "Nominal wages including bonuses were pretty good in December. This certainly had a positive effect on consumption trends.”

At the same time Takumori warned that the January household spending figures may have been inflated due to statistical problems. The data appears to have reflected some unusual seasonal adjustment patterns during the pandemic, he said.

Solid private consumption, which accounts for about 60% of Japan’s gross domestic product, could help boost the country’s economic recovery. Thursday’s revised gross domestic product figure showed that Japan only narrowly avoided a recession at the end of last year on weaker-than-expected consumer spending.

January retail sales data announced late last month also pointed to a rebound in consumption at the start of this year. The stronger-than-forecast data, which includes spending by tourists from overseas, was driven by sales of clothing and cars.

"For the Bank of Japan, which will wrap up a two-day policy meeting later Friday, the data are likely to reinforce the notion that the economy still requires policy support,” said Yuki Masujima, economist at Bloomberg Economics.

Yet inflation outpacing pay hikes continues to be a major concern for Japan and its central bank. While the December wages data came in strong, figures were much weaker in January.

Gov. Haruhiko Kuroda has long maintained that the bank will continue easing until its wage-growth accompanied price goal is met. That view will likely be inherited by Kazuo Ueda, who will take the helm of the bank from April.