| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 2.1% | 1.6% to 3.0% | 4.1% | -2.0% |
| Year over Year | 0.1% | -1.2% to 2.5% | 1.8% | -0.9% |
Highlights
Japanese retail sales came in stronger than expected in January, up 1.8% on the year (vs. consensus +0.1%), led by strong demand for appliances (possibly heat pumps in snowy weather) and automobiles, but the pace of increase was capped by falling fuel prices. The government scrapped a gasoline surcharge at the end of 2025 and department store sales have been hit by Beijing's call on Chinese tourists to boycott Japan over bilateral diplomatic rows. It followed an unexpected 0.9% drop in December in the face of falling fuel costs and a slip in clothing sales.
The Ministry of Economy, Trade and Industry upgraded its assessment, saying retail sales are on a gradual uptrend. Last month it maintained its view in the December report that sales were taking one step forward, one step back after having upgraded it for the first time in eight months in the November report.
Industry data released this week showed that department store sales rebounded 2.3% in January after having recorded their first year-on-year drop in December, down 1.1%. There were rush purchases of high-end watches and jewelries as well as cosmetics before price hikes expected in coming weeks. Domestic shoppers braved bad weather, lifting overall sales and making up for lost sales to visitors from overseas. The recent plunge in the number of Chinese tourists amid the diplomatic feud has hit inbound spending at retail stores. Sales to visitors from some Asian countries were also slower than a year earlier because the Lunar New Year holidays were from Feb. 15-23 this year, compared to Jan. 28-Feb. 24 last year.
Details:
Japan Jan retail sales +1.8% y/y (Dec -0.9%); 1st rise in two months; median forecast +0.1% (range: -1.2% to +2.5%)
Japan Jan retail sales +4.1% m/m (Dec -2.0%); median forecast +2.1% (range: +1.6% to +3.0%)
Japan METI upgrades view: retail sales on gradual uptrend vs. taking one step forward and one step back
Japan Jan retail sales y/y rise led by appliances, autos, while fuels and clothing down
Market Consensus Before Announcement
Japan’s retail sales are projected to inch up on the year in January after unexpectedly declining in the previous month, dragged down by lower fuel costs and weaker clothing sales amid sluggish department store performance.
Retail sales are seen rising a slim 0.1 percent from a year earlier in January, following a 0.9 percent drop the previous month.
Department store sales showed signs of recovery in January as consumption picked up during the year-end and New Year holiday period. Overall sales, however, remained under pressure as a slowdown in automobile sales, combined with falling gasoline prices, weighed on fuel-related revenue.
On a month-on-month basis, retail sales are expected to increase 2.1 percent on a seasonally adjusted basis, reversing a 2.0 percent decline in December.
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.