Econintersect: Japanese retail sales increased in September by 2.3% year-over-year, much above the expected 0.8%. It was the third month of positive retail sales growth after three months of negative growth followed the 01 April consumption tax increase from 5% to 8%. The unexpected increase is a rare bright spot for the Japanese economy which has struggled to assimilate the big tax hike. The accelearting growth is an encouraging trend, but it remains to be seen if the to the 3% to 4% range that was experienced from last November to February 2014. A linear extrapolation would get above 3% in October.
Reuters had a quote from Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities:
“The recovery in consumer spending is gaining pace because demand is improving. Things are finally improving. Consumer spending will make a positive contribution to third-quarter gross domestic product.”
Graph from Financial Times (fast FT)
Sources:
- Japan’s Retail Sales Increase Most in Four Months (Chikako Mogi, Bloomberg, 27 October 2014)
- Japanese retail sales rise faster than expected (fast FT, 28 October 2014)
- Japan retail sales growth accelerates, offering signs of recovery (Stanley White, Reuters, 27 October 2014)
