Japan's worker sentiment falls in January amid rising prices

Japanese workers are feeling less optimistic about the economy, with their sentiment declining in January for the first time in three months as rising prices for food and other essentials led to increased consumer frugality, a government survey showed Monday.

The index measuring current economic conditions among workers dropped 0.4 points from the previous month to 48.6, according to the Cabinet Office's Economy Watchers Survey.

While some respondents noted strong inbound tourism and steady progress in passing on costs, concerns about heightened consumer caution due to price hikes were prevalent.

Retailers reported declining sales in mid-priced products, with an increasing divide between demand for low- and high-priced goods. A clothing store representative expressed worries about future consumer behavior, stating that widespread expectations of further price hikes in food and fuel would lead to even more restrained spending.

Despite the decline, the Cabinet Office maintained its assessment that the economy remains on a moderate recovery path while acknowledging growing concerns over the impact of rising prices on future economic sentiment.

The survey, conducted every month, covered more than 2,000 people in a range of industries to compare current economic conditions with those from three months earlier.