Japan household spending logs surprise 1.3% drop in April: govt

Japanese household spending logged a surprise drop in April while inflation and factory output were also lacklustre, official data showed Friday, fuelling concerns about the world's third-largest economy. Spending fell 1.3 percent on-year, extended its falls to a 13th consecutive month, the internal affairs ministry said. The drop was a surprise given market expectations that spending would turn up for the first time since the government raised Japan's sales tax in April 2014. Separate data from the ministry showed core inflation, excluding volatile fresh food prices, hit 0.3 percent year-on-year while the jobless rate was at an 18-year low of 3.3 percent. The latest inflation beats market expectations for a 0.2 percent rise but is still well short of the Bank of Japan's 2.0 percent target. Analysts say central bank policymakers will almost certainly be forced to expand its monetary easing scheme to jack up prices and counter a downturn in economy. Sustained inflation is a cornerstone of Prime Minister Shinzo Abe's drive to conquer deflation and revive growth. The industry ministry also said Japan's factory output turned up 1.0 percent month-on-month in April, reversing a drop in the previous month.