By Kantaro Komiya

TOKYO (Reuters – Japanese retail sales declined in February due to extended COVID-19 sanctions that hit service sectors businesses. This cast doubt over any prospects for a consumption-led rebound in the quarter.

This week the coronavirus restriction was lifted by the government across the nation. However, householders remain cautious about price increases, which are being driven by the Ukraine conflict and the sharp weakness of the yen.

According to government data, retail sales in February fell 0.8% from one year ago, a decline that was much lower than what the median market expected for a decrease of 0.3%.

This was after a 1.1% increase in January that was revised downwardly. It marked the first year of annual contraction since September when Japan’s Delta coronavirus strain overtook hospitals throughout Japan.

Retail sales decreased 0.8% in February compared to the prior month. This follows a 0.9% increase in previous months.

In most urban areas, curbs were maintained throughout February as the number of coronavirus deaths and infections reached new highs due to Omicron virus.

Russia’s incursion in Ukraine and the subsequent rise of global commodity prices since February, have created more risks for the third-largest country on earth. It is heavily dependent on imports of energy and raw material.

Fumiokishida, Japan’s Prime Minister, directed officials on Tuesday to prepare an economic relief plan by April 30 in order for households and companies to be protected from the rising cost of living.