Japanese household spending fell at a slower pace than expected in October, but the broader consumption trends remained soft in a challenge to policymakers' quest to engineer a solid recovery.
Consumer spending dropped 1.3% in October from a year earlier, data from the internal affairs ministry showed on Friday, better the median market forecast for a 2.6% decline. On a seasonally adjusted, month-on-month basis, spending increased 2.9%, versus an expected 0.4% uptick.
Economists attributed the underlying softness in consumption to rising prices and warm weather, which held consumers back from purchasing seasonal apparel.
The Bank of Japan had been expected to raise interest rates again as early as at this month's policy meeting, though in recent days many economists have cast doubt about such a move as the economy is yet to show signs of a sure-footed recovery.
The BOJ ditched negative rates in March and raised short-term rates to 0.25% in July on the view that Japan was progressing towards durably achieving its 2% inflation target.
Just over half of economists polled by Reuters last month expect the BOJ to raise rates again on Dec. 19.
