Japan retail sales tumble
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Japan retail sales fell more than expected in December, with data suggesting that sluggish household spending will keep fourth-quarter economic growth subdued.
While analysts expect the Bank of Japan to hold off on any more monetary easing at its latest rate review, the weak data is expected to keep policy-makers under pressure to do more to help the fragile economy recover.
Retail sales fell 1.1 per cent for the month compared with the previous December to mark the second straight month of declines, trade ministry data shows.
“It seems households are tightening their purse strings because of rising food costs,” says SMBC Nikko Securities chief economist Junichi Makino.
Japan’s economy has emerged from recession, but growth remains subdued with sluggish demand and a slow rate of growth rate for wages.
Questions & Answers
Q.What was the retail sales decline in Japan for December?
What was the retail sales decline in Japan for December?
Retail sales in Japan fell by 1.1 per cent for December when compared to the previous December. This marks the second consecutive month that retail sales have declined, according to trade ministry data.
Q.What is causing households to spend less, according to an economist?
What is causing households to spend less, according to an economist?
SMBC Nikko Securities chief economist Junichi Makino suggests that households are spending less because of increasing food costs. This indicates a general tightening of purse strings among consumers in Japan.
Q.How are the weak retail sales expected to affect the Bank of Japan?
How are the weak retail sales expected to affect the Bank of Japan?
The weak retail sales data is likely to increase pressure on policymakers to take further action. They are expected to consider more measures to support Japan's fragile economy, despite analysts anticipating no immediate monetary easing.
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