Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Japan's retail sales extend gains but COVID-19 challenges persist

EconomyAug 30, 2021 06:51AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A shopper looks at goods at Japan's supermarket group Aeon's shopping mall as the mall reopens amid the coronavirus disease (COVID-19) outbreak in Chiba, Japan May 28, 2020. REUTERS/Kim Kyung-Hoon/File Photo

By Yoshifumi Takemoto and Kantaro Komiya

TOKYO (Reuters) - Japan's retail sales rose for a fifth straight month in July, beating expectations as the consumer sector continued its recovery, although a coronavirus resurgence has cast doubts over the spending outlook.

A surge in Delta variant cases this month forced the government to widen state of emergency restrictions, which are now threatening to hurt consumer spending and derail a fragile economic recovery.

Retail sales advanced 2.4% in July from the same month a year earlier, government data showed on Monday, slightly faster than economists' median forecast for a 2.1% rise in a Reuters poll. It followed a 0.1% increase in June.

"The recent strength in retail sales is unlikely to last," Marcel Thieliant, Senior Japan Economist at Capital Economics, said in a note.

"The severe Delta wave now hitting the country coupled with an ever-expanding list of prefectures under states of emergency resulted in a renewed weakening in consumption this quarter," Thieliant said.

The better-than-expected rise in retail sales in July came as authorities struggled https://www.reuters.com/lifestyle/sports/tale-two-cities-bubble-tokyo-outside-2021-07-29 to get a defiant public to heed stay-at-home restrictions in major cities like Tokyo, which hosted the Olympics during the month.

The trade ministry data found strong demand for a variety of items such as cars, clothing, general merchandise and food while fuel was helped by higher petrol prices.

Small retail establishments like convenience stores and drug stores saw biggest sales growth from a year earlier.

However, growth was also flattered by the comparison with last year's steep slide, when consumer demand was hurt by the coronavirus pandemic.

Compared with the previous month, retail sales gained a seasonally adjusted 1.1% as consumption continued the surprising growth seen in the second-quarter, helped by the Tokyo Olympics.

The world's third-largest economy grew at a better-than-expected rate in the April-June quarter, thanks largely to private consumption, which makes up more than half of the country's gross domestic product.

But rebounding consumer activity poses a challenge to policymakers as the more contagious Delta variant of COVID-19 upends the nation's healthcare system, with state of emergency curbs now covering nearly 80% of Japan's population.

"People's mobility has been decreasing, and consumption may peak out in August," said Atsushi Takeda, chief economist at Itochu Economic Research Institute, noting that the downward trend could drag until September.

Japan's retail sales extend gains but COVID-19 challenges persist
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Balaji Telang
Balaji Telang Aug 29, 2021 8:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Delta variant is very dangerous, thousands people are dying every day. Government should increase the restrictions to save the lives
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email