business

Japan's retail sales fall for 7th straight month

3 Comments
By Yoshifumi Takemoto

Japanese retail sales fell for the seventh straight month in September as the coronavirus pandemic kept a lid on consumers' shopping appetite, underscoring the fragile economic recovery from this year's slump.

As the harm from the health crisis remains deep, Japanese Prime Minister Yoshihide Suga will announce next week a plan for fresh stimulus to help the recession-stricken economy, sources told Reuters.

Retail sales fell 8.7% in September from a year earlier, government data showed on Thursday, a bigger fall than a median market forecast for a 7.7% drop.

"Consumer spending remains weak. We expect it will stagger in coming months before its gradual pick up," said Takeshi Minami, chief economist at Norinchukin Research Institute. "External demand will likely recover faster, led by China's economic growth rather than domestic demand, which is forecast to stay subdued."

Spending on items such as cars, consumer appliances and clothing declined last month, causing a big fall in the retail sales, the data showed.

Analysts also said the year-on-year decline was exacerbated as people rushed to buy ahead of a sales tax hike in October last year.

Compared with the previous month, retail sales slipped 0.1 % on a seasonally adjusted basis, reversing from a 4.6% gain in August.

The world's third-largest economy is recovering from the worst postwar contraction in April-June, though any rebound is expected modest with growth taking some time to return to pre-COVID-19 levels.

The signs are that lackluster consumer spending and weak capital spending would offset a bounce in exports and factory output, putting policymakers under presser to adopt more steps to help shore up the economy.

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

3 Comments
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If there was even a semblance of leadership and effective plans to keep people afloat during the early days of the pandemic consumer confidence wouldn't have tanked as it has. Consumer spending is not only economical but also psychological, the average consumer saw how ineffective the LDP were and are now holding onto their cash for only essential items.

1 ( +1 / -0 )

Retail sales fell 8.7%

Isn't this fully explainable by not having Chinese tourists?

2 ( +2 / -0 )

Retail numbers will never return to 2019 numbers and reasons for that are easy to see if you want to see them.

the quasi disappearance of tourist spending means it can no longer compensate the constant slow decline in domestic retail spending caused by a declining population aggravated by the fact that the older generations are the bigger spenders in Japan.

by the time tourism returns , the population decline will have progressed to far to return to 2019 retail numbers.

on top of that and for the first time since long many companies are firing people an winter bonusses get cut

3 ( +3 / -0 )

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