Photographer: Tomohiro Ohsumi/Bloomberg

Japanese Retail Sales Growth Slows as Wage Gains Stall

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Japan’s retail sales rose less than economists forecast in February, signaling that consumer spending is struggling to gain traction.

Key Points

  • Retail sales increased 0.1 percent in February from a year ago (forecast +0.7 percent), after rising 1 percent in the previous month.
  • Measured month-on-month, sales rose 0.2 percent (forecast +0.3 percent).

Big Picture

Japan’s recent growth has been mostly supported by exports, with tepid gains in wages limiting any recovery in domestic private consumption. Workers will receive a smaller increase in base pay this year, according to preliminary results from the annual spring wage talks. Data on household spending, the job market, production and consumer prices will be released on Friday, giving a more complete picture of how the economy performed last month.

Economist Comments

  • "Consumer sentiment isn’t good basically because of wages. Salaries aren’t rising enough while prices are edging up due to the effect of energy prices and a weaker yen," said Atsushi Takeda, an economist at Itochu Corp. in Tokyo 
  • "Looking ahead, the results of the wage talks this spring aren’t strong either," Takeda said.
  • Given some indicators on consumer sentiment, there is no sign that private consumption is significantly improving, Masamichi Adachi, senior economist at JPMorgan Securities Japan, wrote in a March 23 report.


  • Sales at department stores and supermarkets dropped 2.7 percent in February from a year ago (forecast -1.8%). That was the seventh straight monthly fall.
  • Sales of food and beverages as well as fabrics, apparel and accessories fell partly because there were fewer business days in February this year than last year, which was a leap year.

— With assistance by Tomoko Sato, and Yoshiaki Nohara

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