Japanese shoppers have yet to open their wallets

Official figures show that the retail sector's takings fell by 1% on the month in April, and by 0.8% compared with the same period last year.

The data wrong-footed forecasters, who had predicted a year-on-year decline of just 0.2%.

The figures contradicted recent signs that strong export sales were feeding through to increased consumer demand.

Sales tax effect

"As a trend, most consumption-related data were fairly strong in January-March, but the numbers we've seen lately have not been as good," said Azusa Kato, economist at BNP Paribas.

"Perhaps consumption is not as strong as everyone has begun to think."

A pick-up in consumer spending is seen as vital to consolidating Japan's tentative recovery, which follows a ten-year period of stagnation punctuated by outright recession.

While exports and industrial activity have picked up sharply in recent months, the latest figures suggest that consumers remain unconvinced that a sustained recovery is on the cards.

One factor holding back consumer spending in Japan is deflation, where falling prices lead shoppers to defer major purchases.

Recent data showed that deflationary pressures are still weighing on the economy, despite the central bank's efforts to stimulate demand by holding interest rates effectively at zero.