Japan’s retail sales rose for the third straight month in May 2022 and at the steepest pace since May 2021. The lift came from the strength in consumption as the government has lifted all COVID-19 restrictions. Japanese sales of general merchandise picked up sharply at 20.7% vs 8% in April with faster rises in sales of fabric apparel & accessories at 11.8% vs 9.7%. Meanwhile, sales of motor vehicles dropped for the ninth consecutive months -10.1% vs -7.5%. Auto sales have been cruelled by the supply crunch of materials and soaring fuel prices.
Japanese Retail Sales May 2022 Highlights
- Retail sales in Japan rose 3.6% yoy in May 2022, exceeding market consensus of 3.3% and following an upwardly revised 3.1% gain a month earlier.
- Third straight month of increase in retail trade
- Sales of general merchandise picked up sharply (20.7% vs 8% in April), amid faster rises in sales of fabric apparel & accessories (11.8% vs 9.7%), fuel (15.0% vs 13.8%) and medicine & toiletries (5.0% vs 3.0%) and a further increase in sales of others (8.6% vs 9.7%).
- In contrast, sales of food & beverages fell 0.2 percent after rising 0.5 percent in April, while those of machinery and equipment shrank 3.3% following a 0.8% rise in April.
- Sales of motor vehicles dropped for the ninth consecutive months (-10.1% vs -7.5%).
- On a monthly basis, retail sales grew by 0.6% in May, the third consecutive month of increase.
Yen Weakness Affect
The weakness of the yen has also spurred domestic sourced retail sales versus imported, such as fuel. The Bank of Japan reinforced its commitment to low interest rates despite the rising inflation around the world.
Just two days ago BoJ Governor Japan speaking at the BIS said core CPI excluding fresh food reached 2.1% in April and May, almost wholly due to international energy price increases. He reiterated that unlike other economies, the Japanese economy has not been much affected by the global inflationary trend so monetary policy will continue to be accommodative
He also added 15-year deflation experienced in Japan made firms very cautious in raising prices and wages. The BoJ last month said it would purchase 10-year Japanese government bonds at a yield of 0.25% every business day to ensure that the yield doesn’t exceed that level. That sent the yen weakening to more than 130 to the dollar for the first time since April 2002 and from there to 136.
From The TradersCommunity News Desk