| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | -1.2% | -1.6% to -0.3% | -2.0% | 4.1% | 3.0% |
| Year over Year | 0.4% | -1.0% to 0.8% | -0.2% | 1.8% |
Highlights
Japanese retail sales posted their first year-on-year drop in two months (the third in 12 months), down a slight 0.2% in February (some had forecast a slight gain), after a modest 1.8% gain in January, in payback for a high level of auto sales in February 2025 and a 10th straight drop in fuel sales. The impact of the Mideast conflict triggered by the Feb. 28 attacks on Iran by U.S. and Israeli forces has been largely limited on the domestic front as the government continues to limit energy price hikes with subsidies to refineries and electric power suppliers.
In January, falling temperatures boosted demand for heat pumps and new vehicle sales picked up. In February, some retailers reported a rise in spring clothing sales amid milder weather later in the month but those sales failed to post an increase in the METI's wider retail sales data. Solid demand for drugs and cosmetics as well as recovering sales of automobiles and appliances were more than offset by sluggish clothing sales and a sharp drop in fuel prices after the government scrapped decades-old surcharges at the end of 2025.
The Ministry of Economy, Trade and Industry maintained its assessment after upgrading it last month, saying retail sales are on a gradual uptrend.
Industry data released last week showed department store sales rose 1.6% on year in February after rebounding 2.3% in January, led by domestic demand for spring clothing as temperatures climbed in the second half of the month. There remains strong demand for high-end watches and jewelries on the back of booming stock markets before they were hit by a spike in crude oil prices caused by the Iran war that broke out in late February. On the downside, sales to visitors from overseas marked their fourth straight year-on-year decline as Chinese tourists continued boycotting Japan over bilateral diplomatic rows, although spending by visitors from Taiwan, Thailand and Malaysia picked up some of the slack.
Details:
Japan Feb retail sales -0.2% y/y (Jan +1.8%); 1st fall in 2 months; median forecast +0.0% (range: -1.0% to +0.7%)
Japan Feb retail sales -2.0% m/m (Jan revised to +3.0% from +4.1%); median forecast -1.4% (range: -1.6% to -1.2%)
Japan METI keeps view after upgrading it in Jan report: retail sales on gradual uptrend
Japan Feb retail sales y/y fall amid sluggish clothing sales, slumping fuel sales, offsetting solid demand for autos, drug/cosmetics, appliances
Market Consensus Before Announcement
Japan’s retail sales are expected to slow in February after rising in January, when demand for appliances and automobiles provided support, while falling fuel prices capped the overall pace of growth. Retail sales are forecast to post a slight 0.4% rise on the year in February, following a 1.8% increase in January. On a month-on-month basis, sales are expected to fall 1.2%, reversing a 3.0% gain (revised down from 4.1%) in January.
Sales at major department stores remained solid in February, though growth slowed from the previous month, when New Year-related demand boosted consumption. Auto retail sales are also seen weakening, as new passenger car registrations showed signs of decline. In fuel retailing, the year-over-year drop in February is expected to widen slightly. Gasoline prices also showed a modestly larger decline from a year earlier compared with the previous month.
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.