Japan’s retail sales rose in September at the fastest pace in three months as shoppers spent more on clothes and daily goods in a sign that consumer spending remains strong due to a tight labor market.
TOKYO (Reuters) – Japan&rsquo-s retail sales rose in September at the fastest pace in three months as shoppers spent more on clothes and daily goods in a sign that consumer spending remains strong due to a tight labor market.
The 2.2 percent annual increase in retail sales in September was less than the median estimate for a 2.5 percent annual increase and follows a revised 1.8 percent annual increase in August.
Strong consumer spending makes it more likely that consumer prices will accelerate in the future, which supports the Bank of Japan&rsquo-s argument that it can afford to keep its monetary easing unchanged as inflationary pressure gradually builds up.
&ldquo-Consumption in July-September is likely to be a little bit weaker than the previous quarter, but the outlook remains healthy,&rdquo- said Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.
&ldquo-Consumer spending is still in moderate recovery. The labor market will support spending in the future.&rdquo-
Spending on clothes rose 5.0 percent in September from a year ago, the fastest increase in three months, data from the trade ministry showed on Monday. Spending on daily goods like soap and shampoo rose an annual 1.2 percent, versus a 0.4 percent annual decline in the previous month.
The BOJ is expected to signal that it will hold off on expanding stimulus for the time being at a policy meeting ending on Tuesday.
The policy meeting comes after Prime Minister Shinzo Abe&rsquo-s victory in a lower house election, which heightened expectations the BOJ&rsquo-s ultra-loose policy – a key pillar of his &ldquo-Abenomics&rdquo- stimulus policies – will continue.
Core consumer prices rose 0.7 percent in September from a year ago, which is distant from the BOJ&rsquo-s 2 percent inflation target, although the central bank argues that consumer prices will eventually pick up because of the tight labor market and wage growth, albeit slow.
0 comments
Share
