People walk through Omicho Market in Kanazawa, Japan. (Photographer: Tomohiro Ohsumi/Bloomberg)

Japan’s Retail Sales Rebound to Modest Gain in February

(Bloomberg) -- Japan’s retail sales rebounded in February following a sharp decline a month earlier, with the increase was driven mostly by higher prices, particularly for energy and vegetables.


  • Retail sales rose 0.4 percent in February (forecast +0.6 percent) from January, when they declined a revised 1.6 percent.
  • Sales increased 1.6 percent from a year ago (forecast +1.7 percent).
  • Sales at department stores and supermarkets advanced 0.6 percent from a year earlier (forecast +0.9 percent).

Key Takeaways

A sustained, robust rise in consumer spending is needed for Japan’s export-driven economic recovery to become self-sustaining. While wages and spending have improved, the pay raises needed to drive inflation higher have eluded workers for some time. The results of this year’s spring wage negotiations point to slightly bigger raises than last year, but they are unlikely to spur significantly stronger consumption.

Japan’s Retail Sales Rebound to Modest Gain in February

Economist Views

  • “I think the pace of consumption growth will be a bit slower in fiscal 2018," said Hiroaki Muto, chief economist at Tokai Tokyo Research Center, who cited falling stock prices as one possible factor.
  • "Consumer spending is likely to pick up somewhat as the prices of fresh produce stabilize and smaller companies are pressed more to give raises due to the labor shortage," said Takeshi Minami, chief economist at Norinchukin Research Institute.
  • "Consumer spending won’t be strong enough to spur growth, but it will provide a floor for it,” Minami said, referring to gross domestic product.

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