Bank of Japan report: Rising prices are starting to squeeze Japanese households.

Rising prices may be starting to squeeze Japanese households, leading to a reduction in non-essential spending. A survey released by the Bank of Japan on Monday showed that respondents had reduced their spending on dining out, clothing, and travel compared to a year ago. At the same time, the survey showed that their spending on food and other daily necessities such as detergent had increased compared to a year ago. The central bank is scheduled to hold a policy-setting meeting next week. Despite the worsening inflation risks, overnight index swap markets are only expecting an 18% chance of a rate hike in April.