Japanese retail sales rose for the third consecutive month in May as household spending surpassed market expectations.
According to government data released on Tuesday, Japanese Retail sales increased 8.2% in May from the same time a year before. Last month’s increase was the third consecutive month of growth ad surpassed market expectations for an increase of 7.9%.
The rise in retail sales in the world’s third largest economy was underpinned by the spending on general merchandise, clothing, cars and fuel.
However, compared with April’s data, Japanese retail sales lost 0.4 per cent on a seasonally adjusted basis. This can be taken as a sign that the trend for spending by Japanese consumers was running out of steam.
Takeshi Minami, chief economist at Norinchukin Research Institute said of the Japanese Retail Sales figures:
“Many elderly were unlikely to go out and spend money in April and May as there was still a state of emergency or quasi-emergency measures (in major areas),”
“It’s hard to imagine that the Olympics will set off a spending rush,”
Japan is currently dealing with a fresh wave of infections from the coronavirus pandemic. The underlying trends in consumption remain heavily linked to COVID-19-linked pressures. The risks remain that another resurgence in Covid-19 infections would impact Japanese consumption in the near future.
Tokyo is set to host the Olympic Games in July. However, analysts expect the Japanese economy to show just minimal growth in the second quarter of 2020 after prolonged coronavirus emergency restrictions hurt the economic growth outlook.
