Japan's consumer confidence slipped in January, possibly raising challenges for the Bank of Japan and other government officials who want to boost consumer spending to sustainably galvanize overall national economic expansion.

The official seasonally adjusted consumer confidence index in January logged at 35.2, down from 36.2 in December, and notching the lowest level since March of 2023, reported the Cabinet Office, citing its monthly survey.

All four sub-categories of the overall consumer confidence index declined in January, including the index for overall livelihood, down to 32.2 from 34.1 in December, and the income growth index, down to 39.9 in January from 40.2 in December, reported officials.

The employment index fell to 41.0 in January from 41.2 in December, and the

willingness to buy durable goods index declined to 27.5 from 29.4, added the Cabinet office.

Japanese consumers in January expected inflation to continue in 2025, with 93.3% responding they anticipate prices will "go up."

The Cabinet Office survey was conducted on January 15, and covered 8,400 households, reported the agency.

The slip in consumer confidence in January may present hurdles for the nation's central bank, the Bank of Japan.

The Bank of Japan has reiterated that it seeks real wage growth in the nation so that consumers can spend more, leading to a "virtuous cycle" of retail spending and general economic expansion.

Recent rounds of worker pay negotiations in Japan have somewhat fulfilled the Bank of Japan's plans, although real wage growth has been modest.

A decline in consumer confidence, and subsequent soft retail sales, could hamper the Bank of Japan's plans for modestly higher interest rates in Japan, which while cooling inflation, could also tend to curtail wage growth and consumer outlays.