A man walks through a street in Tokyo's Shinjuku district March 8, 2012.
A man walks through a street in Tokyo's Shinjuku district March 8, 2012. Reuters / Yuriko Nakao

Japan's household spending rose for a second consecutive month year-on-year in February, helped by a flattering comparison with last year's sharp pandemic-induced slump but the consumer sector is now facing growing headwinds from soaring prices.

Households cut spending from the previous month as more rapid food and fuel price rises and the Omicron variant kept wallets shut, casting a shadow over the world's third-largest economy.

In a sign of trouble for consumer sentiment, real wage growth stagnated in February as global inflationary pressures that have been worsened by the Russia-Ukraine war weighed on households' purchasing power.

Household spending increased 1.1% in February from a year earlier, government data showed, much weaker than the market forecast of a 2.7% gain in a Reuters poll.

The month-on-month figures showed a sharp 2.8% decline, also weaker than a forecast 1.5% drop.

The data raises some concerns for policymakers looking for ways to offset the hit households are taking from soaring global inflation and a weakening yen, which is pushing up import costs, as the economy shakes off the pandemic's drag.

Government data on Tuesday also showed inflation-adjusted real wages hit a standstill in February, as growth of consumer prices offset gains in nominal wage growth, adding to signs that prospects for households aren't brightening.

The economy is expected to grow in the current quarter following a projected contraction in the first three months of the year, though it is facing an unpredictable outlook in part due to the Ukraine situation and the weak yen.