| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 0.6% | -2.3% to 1.0% | 1.9% | 1.3% | 2.1% |
| Year over Year | 3.5% | 1.0% to 4.3% | 5.3% | 2.1% | 2.8% |
Highlights
Japanese retail sales surged 5.3% on the year in May, coming in much stronger than expected and hitting the highest pace since 5.4% in November 2023, as demand for vehicles, particularly used ones, continued to pick up, booming stock prices prompted consumers to shop for luxury goods and hot weather appeared to have boosted sales of air conditioners and fans. News reports also pointed to solid demand for big-screen TVs ahead of the FIFA World Cup soccer games.
Among other uplifting factors, the weak yen has revived spending by visitors from Asia and there is persistent demand for drugs/cosmetics. On the downside, the prices for fuels, and thus their sales, stayed below their year-earlier levels, thanks to subsidies aimed at easing the impact of the Mideast conflict.
The Ministry of Economy, Trade and Industry maintained its assessment after a January upgrade, saying retail sales are on a gradual uptrend. Sales jumped a seasonally adjusted 1.9% on the month after an equally strong 2.1% gain in April.
The three-month moving average rose 1.7% in May after rising an upwardly revised 0.3% in April and 0.6% in March.
Industry data showed department store sales posted their fifth straight year-on-year increase in May, up 8.3%, accelerating from a 5.2% gain in April, as spending by visitors from overseas marked a double-digit percentage jump (+16.7%) as seen in the previous month (+18.3%). There was one more public holiday and one more Sunday compared to a year earlier, which led to solid sales to domestic customers.
The yen remains stubbornly weak despite rounds of currency market intervention by the Ministry of Finance from late April to early May, which supported the purchasing power of visitors from Hong Kong, Taiwan, Malaysia and Singapore, offsetting a 5% drop in spending by Chinese tourists.
Retailers are counting on solid demand for big-screen TVs, beverages and clothing (soccer uniforms) in May and June ahead of and during the World Cup soccer tournament that lasts for a little over a month from June 11 to July 19. There was similar demand four years ago but it was partly dampened by restrictions on personal and business activities during the pandemic.
Details:
Japan May retail sales +5.3% y/y (Apr revised to +2.8% from +2.1%); 3rd straight rise; median forecast +3.5% (range: +1.0% to +4.3%)
Japan May annual retail sales at +5.3%, highest since Nov. 2023 when they were at +5.4%
Japan May retail sales +1.9% m/m (Apr revised to +2.1% from +1.3%); median forecast +0.6% (range: -2.3% to +1.0%)
Japan METI maintains view: Retail sales on gradual uptrend
Japan May retail sales y/y rise led by autos, appliances, department stores, drugs/cosmetics, food/beverages
Market Consensus Before Announcement
Japanese retail sales are seen rising for a third straight month on the year in May, supported by solid growth in department store sales and a smaller decline in fuel prices than in the previous month, providing momentum for overall retail sales.
May retail sales are expected to rise 3.5 percent, matching the strongest increase since April 2025, when they climbed by that amount. This compares with a revised 2.8 percent increase in April, which was sharply revised up from the preliminary reading of 2.1 percent.
Retail sales in April were supported by continued demand for clothing and luxury goods at department stores, a recent pickup in vehicle purchases, and robust sales of drugs and cosmetics, offsetting the impact of lower fuel prices resulting from subsidies aimed at easing the burden of the Middle East conflict.
On a month-on-month basis, sales are projected to rise 0.6 percent, following a revised 2.1 percent gain in April, up from the preliminary reading of a 1.3 percent increase.
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.