Japan December retail sales below expectations as BOJ meets
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Japanese retail sales rose less than expected in December, government data showed on Monday, unwelcome news as the Bank of Japan meets to set monetary policy.
Retail sales rose 0.6 percent in December from a year earlier, below the median market forecast for a 1.3 percent increase.
The Bank of Japan is expected to announce a steady monetary policy after its two-day meeting Tuesday and seek to allay speculation of an early tapering of its massive stimulus.
Weak consumer spending has dogged Japan’s economy, which has struggled to achieve steady recovery after decades of deflation and stagnation.
“I didn’t expect December retail sales to be strong because end-year private consumption wasn’t strong,” said Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanely Securities.
“Prices have been rising but it’s mostly due to the rise in energy prices, and domestic demand hasn’t changed…We are looking carefully at whether this would lead to sustained inflation,” Tonouchi added.
Japan’s economy expanded for a third straight quarter in July-September as exports recovered, but domestic activity remained weak. Recent data has shown Japan’s core consumer prices fell at the slowest annual pace in nearly a year, a tentative sign that inflation and domestic demand may pick up in the coming months.
Questions & Answers
Q.What was the actual increase in retail sales in December compared to the previous year?
What was the actual increase in retail sales in December compared to the previous year?
Japanese retail sales increased by 0.6 percent in December from a year earlier. This figure was lower than the median market forecast, which had predicted a 1.3 percent rise.
Q.What impact could weak consumer spending have on the Japanese economy?
What impact could weak consumer spending have on the Japanese economy?
Weak consumer spending has consistently hindered Japan's economy, making it difficult for the country to achieve a sustained recovery. This issue persists after decades of deflation and stagnation.
Q.Why didn't one economist expect strong retail sales for December?
Why didn't one economist expect strong retail sales for December?
Shuji Tonouchi, a senior market economist, did not expect strong December retail sales because end-year private consumption was not robust. He noted that price rises were mainly due to energy costs, not increased domestic demand.
Q.What is the Bank of Japan's likely approach to monetary policy after its meeting?
What is the Bank of Japan's likely approach to monetary policy after its meeting?
The Bank of Japan is anticipated to announce a steady monetary policy following its two-day meeting. It aims to calm speculation about any early reduction in its substantial stimulus measures.
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