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Retail sales in Japan rise 0.1 percent

Retail sales in Japan rise 0.1 percent

Japan's retail sales rose less than expected in November, adding to concern consumer spending isn't growing fast enough to spur the expansion of the world's second-largest economy.
Receipts at retailers edged up a seasonally adjusted 0.1 percent in November from a month earlier, the trade ministry said yesterday, less than the 0.6 percent median estimate of six economists surveyed by Bloomberg News. From a year earlier, sales unexpectedly slipped 0.1 percent, ending three months of gains.
Governor Toshihiko Fukui on December 25 reiterated that recent consumption and inflation numbers were "somewhat weak" and the bank needs to see more data before raising interest rates. Bad weather and sluggish wage growth last quarter contributed to the biggest decline in consumer spending in almost a decade.
"Lackluster's the word for it," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. "For a while they were blaming the rainy summer weather. In October it was the heat. But at the end of the day the consumer's going nowhere."
The yen traded at 118.82 per dollar at 1:03 p.m. in Tokyo, compared with 119.13 before the report was published.
November's retail numbers were held down by a 1.3 percent drop in food sales, as the price of fresh fruit and vegetables, a component excluded from the central bank's preferred measure of inflation, dropped 0.9 percent in the month, according to ministry spokesman Takahide Arai.
Fuel sales, the only positive contributor in yesterday's report, climbed 5.3 percent from a year earlier, the 32nd consecutive month of gains. Receipts in November rose in step with a 5.4 percent increase in retail gasoline prices reported by the Oil Information Center in Tokyo.
The retail sales data "are dominated by swings in prices," Cohen said. 'There's still this aspect that the consumer isn't supporting growth." Core consumer prices, excluding fresh food, rose 0.2 percent in November from a year earlier, the statistics bureau said on Tuesday.
The Bank of Japan's policy board last week voted to hold interest rates at 0.25 percent, the lowest among major economies. The bank raised rates for the first time in six years in July.
Department store sales fell 0.2 percent in November from a year earlier, as unusually warm weather in the first half of the month discouraged sales of winter clothes, according to the Japan Department Stores Association. Supermarket sales, which have declined every month this year, fell 2.7 percent in November, the Japan Chain Store Association said last week.
Slow wage growth may be weighing on consumer spending, which according to the government's household survey has fallen every month this year. Pay gains since January have totaled less than 10,000 yen ($86) after declining more than 10 percent, or 400,000 yen, between 1997 and 2005, labor ministry reports show.
Personal consumption fell 0.9 percent in the third quarter, the biggest decline since a 3.6 percent drop in the second quarter of 1997, when a new sales tax knocked the wind out of consumers. Weakness in consumption remains a drag on the economy's longest postwar expansion, the Cabinet Office said in its December economic report.


Updated : 2021-05-16 18:31 GMT+08:00