Photographer: Kiyoshi Ota/Bloomberg

Japan Retail Sales Disappoint After Weak 3Q Consumption

Updated on
  • Consumer spending still soft despite economic recovery
  • Stronger wage gains seen as key to full consumer revival

Japan’s retail sales fell short of expectations in October, raising questions about an expected rebound in consumption after a weak third quarter.


  • Retail sales fell 0.2 percent in October from a year earlier (forecast +0.2%)
  • Sales were unchanged from September (forecast +0.2%)
  • Sales at department stores and supermarkets fell 0.7 percent from a year earlier (forecast -0.8%)

Key Takeaways

While exports have driven much of the growth during Japan’s longest economic expansion since 2001, private consumption had been recovering, rising modestly for six straight quarters before falling 0.5 percent in the three months through September. The decline was blamed in part on bad weather in August, when retail sales fell 1.6 percent from a month earlier as shoppers stayed at home. The weather again weighed on retail sales in October, as typhoons and heavy rain kept people at home, the economy ministry said.

Economist Views

  • "Auto sales have generally been quite steady but the fundamental spending, the core domestic spending done by the Japanese for things like food -- that spending is still weak," said Atsushi Takeda, an economist at Itochu Corp. in Tokyo.
  • "The key to consumer spending for this quarter will come in December, with the year-end sales," Takeda said. "Bonuses haven’t been growing too much so far, and major companies have cut their bonuses.”
  • "I wasn’t optimistic about consumption," said Yasutoshi Nagai, chief economist at Daiwa Securities Co. "When you look at monthly wage data, they are not rising much. I’m not sure if people spend money just because good economic conditions improve their mindset."

— With assistance by James Mayger, Tomoko Sato, Yoshiaki Nohara, and Yuko Takeo

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