| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 1.1% | 0.2% to 1.4% | 1.0% | -0.2% | -0.6% |
| Year over Year | 2.2% | 1.7% to 3.0% | 2.0% | 2.2% | 1.9% |
Highlights
Key points:
--Japanese retail sales remained sluggish, posting a modest 2.0% rise on the year in June after slowing sharply to +1.9% in May (revised down from +2.2%) from +3.5% in April as department store sales suffered a fifth straight drop, hit by lower inbound spending amid a firmer yen and stricter duty-free shopping rules. New vehicle sales saw a pullback after recovering from last year's production suspension by the Toyota Motor group over safety test scandals.
--Continued solid demand for drugs and cosmetics are propping up retail sales. Appliances are also up as hot and humid weather pushed up demand for air conditioners.
--The Ministry of Economy, Trade and Industry maintained its assessment after downgrading it for the first time in eight months last month, saying retail sales are taking one step forward and one step back, instead of being on a gradual pickup trend.
--On the month, retail sales rose a seasonally adjusted 1.0% after slipping 0.6% in May (revised down from -0.2%) and rising 0.7% in April.
Takeaway: The recent appreciation of the yen and stricter duty-free shopping rules continued to dampen spending by visitors from overseas, hurting department store chains. Overall retail sales, up for more than three years, are expected to continue posing year-on-year gains but at a slower pace amid falling real wages and elevated costs for necessities.
--Japanese retail sales remained sluggish, posting a modest 2.0% rise on the year in June after slowing sharply to +1.9% in May (revised down from +2.2%) from +3.5% in April as department store sales suffered a fifth straight drop, hit by lower inbound spending amid a firmer yen and stricter duty-free shopping rules. New vehicle sales saw a pullback after recovering from last year's production suspension by the Toyota Motor group over safety test scandals.
--Continued solid demand for drugs and cosmetics are propping up retail sales. Appliances are also up as hot and humid weather pushed up demand for air conditioners.
--The Ministry of Economy, Trade and Industry maintained its assessment after downgrading it for the first time in eight months last month, saying retail sales are taking one step forward and one step back, instead of being on a gradual pickup trend.
--On the month, retail sales rose a seasonally adjusted 1.0% after slipping 0.6% in May (revised down from -0.2%) and rising 0.7% in April.
Takeaway: The recent appreciation of the yen and stricter duty-free shopping rules continued to dampen spending by visitors from overseas, hurting department store chains. Overall retail sales, up for more than three years, are expected to continue posing year-on-year gains but at a slower pace amid falling real wages and elevated costs for necessities.
Market Consensus Before Announcement
Key forecasts:
--Japanese retail sales are forecast to show a modest 2.2% rise on the year in June, little changed from +1.9% in May (revised down from +2.2%) and slowing sharply from +3.5% in April as department store sales suffered a fifth straight drop, hit by lower inbound spending amid a firmer yen and stricter duty-free shopping rules. Continued solid demand for drugs and cosmetics are propping up retail sales. New vehicle sales are on a gradual recovery trend after last year’s production suspension by the Toyota Motor group over safety test scandals.
--Retail sales are seen up a solid 1.1% on year after slipping 0.6% in May (revised down from -0.2%) and rising 0.7% in April.
--Japanese retail sales are forecast to show a modest 2.2% rise on the year in June, little changed from +1.9% in May (revised down from +2.2%) and slowing sharply from +3.5% in April as department store sales suffered a fifth straight drop, hit by lower inbound spending amid a firmer yen and stricter duty-free shopping rules. Continued solid demand for drugs and cosmetics are propping up retail sales. New vehicle sales are on a gradual recovery trend after last year’s production suspension by the Toyota Motor group over safety test scandals.
--Retail sales are seen up a solid 1.1% on year after slipping 0.6% in May (revised down from -0.2%) and rising 0.7% in April.
Definition
Retail Sales measure the total receipts at stores that sell durable and nondurable goods. The data are part of the Preliminary Report on the Current Survey of Commerce.
Description
Another way to look at consumer spending in addition to the household spending survey is through the retail sales report. This report gives the total value of goods and services sold each month at retail outlets. The preferred number is the change from the previous year. The report serves as a direct gauge of consumption and consumer confidence. Consumer spending is one of the most important leading indicators for the Japanese economy. Increasing sales signal consumer confidence and economic growth, but higher consumption also leads to inflationary pressures.
