Japan's core consumer prices fell in December from a year earlier for a 22nd consecutive month, as slow wage growth and sluggish demand kept the country mired in deflation while the government grapples with heavy public debt.

Rating agency Standard & Poor's lowered Japan's long-term debt rating on Thursday, citing worries that its debt-to-GDP ratios would continue rising, and the IMF offered sharp words to both Japan and the United States as it called for urgent action to cut their deficits.

Japan's jobless rate fell slightly in December but wage earners' household spending tumbled, as a boost to consumption from government subsidies faded late last year.

Consumption could pick up again this year as wages gradually recover, but the Bank of Japan's forecast of mild price gains in the year starting in April may be overly optimistic due to the negative output gap and lackluster domestic demand, economists say.

Rising energy and commodity prices could push up Japan's headline prices but will have little impact on the underlying trend, suggesting the central bank will need to stick with its ultra-easy monetary policy, economists say.

The impact from the rise in commodities prices will strengthen as millers are likely to raise prices from April and processed food prices are also expected to rise somewhat, and most of all, energy prices will increase, said Takeshi Minami, chief economist at Norinchukin Research Institute.

But in other areas it is still difficult to pass on rising input costs. It's difficult for the core CPI to turn positive.

The core consumer price index (CPI), which includes oil products but excludes volatile prices of fresh fruit, vegetables and seafood, fell 0.4 percent in December from a year earlier, versus the median estimate for a 0.5 percent annual decline.

The so-called core-core inflation index, which excludes food and energy prices and is similar to the core index used in the United States, fell 0.7 percent in the year to December, less than a 0.9 percent annual decline in the previous month.

Core consumer prices in Tokyo, available a month before the nationwide data, fell 0.2 percent in the year to January, less than the median estimate for a 0.3 percent annual decline.

(Editing by Edmund Klamann)