| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | -1.7% | -2.0% to -1.2% | -4.1% | 1.9% | 1.7% |
| Year over Year | 2.6% | 1.8% to 5.2% | 0.5% | 5.3% | 5.0% |
Highlights
Japanese retail sales rose 0.5% on the year in June, coming in weaker than expected and slowing sharply from a downwardly revised 5.1% rise in May, which was the highest pace since 5.4% in November 2023. Demand for vehicles continued to pick up while typhoon weather and lower temperatures compared to a year earlier dampened sales of all other categories including clothing and appliances such as air conditioners. Government subsidies have put a lid on retail prices of gasoline and diesel, exerting downward pressure on fuel sales.
The Ministry of Economy, Trade and Industry maintained its assessment after upgrading it last month, saying retail sales are “on a gradual uptrend.” Sales slumped a seasonally adjusted 4.1% on the month in June after posting gains of 1.7% in May and 2.1% in April. The three-month moving average slipped 0.2% after rising 1.6% in May and edging up 0.3% in April.
Industry data released last week showed department store sales posted their sixth straight year-on-year rise June, up 2.3%, but the pace of increase decelerated from 8.3% in May and 5.2% in April in light of rainy and typhoon weather. There was also one less Sundays (four) compared to June last year, which also led sales to domestic customers to mark their first drop in 11 months (-0.2%).
On the upside, the weak yen kept sales to visitors from overseas above year-earlier levels for the fourth consecutive month, up 29.8%, following a 16.7% gain in May. Solid spending by those from Southeast Asia and Europe continue. Even spending by Chinese shoppers rose about 16% to record its first year-on-year increase in seven months, although the number of those from China was still down 25% as many of them are bypassing Japan at the request of Beijing over bilateral diplomatic rows.
Details:
Japan June retail sales +0.5% y/y (May revised to +5.0% from +5.3%); 4th straight rise; median forecast +2.6% (range: +1.8% to +5.2%)
Japan June retail sales -4.1% m/m (May revised to +1.7% from +1.9%); median forecast -1.7% (range: -2.0% to -1.2%)
Japan METI maintains view: retail sales"on uptrend" after upgrading last month from"on gradual uptrend"
Market Consensus Before Announcement
Japanese retail sales are expected to continue posting solid gains in June, marking a fourth straight month of year-on-year increases, supported by improving demand for automobiles and other goods. Despite concerns over geopolitical tensions in the Middle East, the impact on overall consumer spending appears to have been limited.
Retail sales are projected to increase 2.6 percent from a year earlier in June after posting a revised 5.0 percent gain in May, when they climbed to the highest level since November 2023. In May, demand for vehicles, particularly used cars, continued to strengthen, while soaring stock prices encouraged spending on luxury goods. Hot weather also appeared to boost sales of air conditioners and electric fans.
The momentum is expected to carry over into June, supported by solid automobile sales, as reflected in strong new passenger vehicle registrations. Sales at major department stores slowed in June but are still expected to post healthy gains. Fuel sales are likely to decline, although they are expected to show some improvement from the previous month.
On a month-on-month basis, retail sales are projected to fall 1.7 percent in June following a revised 1.9 percent increase in May. The Ministry of Economy, Trade and Industry upgraded its assessment in May, saying retail sales were"on an uptrend. Previously it said sales were “on a gradual uptrend.”
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.