Japan consumer mood in March at highest in almost 6 yrs-govt

TOKYO (Reuters) - Japanese consumer confidence improved in March to the highest level in almost six years, a Cabinet Office survey showed on Wednesday, indicating that aggressive government and central bank policies are having their desired effect.

The survey's sentiment index for general households, which includes views on incomes and jobs, was 44.8 in March, which was the highest since May 2007. That was also up from a revised 44.2 in February.

The Cabinet Office upgraded its view on the consumer sentiment index saying it is showing signs of improvement. That compared with its previous view that sentiment was picking up.

A reading below 50 suggests consumer pessimism.

The survey also showed 71.8 percent of respondents believe prices will rise in the next 12 months, the highest number since April 2011.

"An improving consumer confidence supports private spending," said Azusa Kato, senior economist at BNP Paribas in Tokyo.

"And the spending will likely stay firm this fiscal year as benefits from the government's extra budget will appear in the economy soon and there will be rush demand ahead of planned sales tax hike (in next April)."

The consumer confidence survey has been conducted since 1982 and "general households" are those with two or more people.

Kato said incomes will be closely watched as a rise in price expectations may not necessarily match the pace of recovery in base salaries.

Data this month showed Japanese wage earners' total cash earnings fell 0.7 percent in February from a year earlier as overtime pay declined the most in more than three years.

(Reporting by Tokyo Newsroom; Editing by Shri Navaratnam and Sanjeev Miglani)