TOKYO: Japan’s retail sales dropped for the third time this year, sapping an economy that analysts say struggled last quarter amid sluggish exports and production.
Sales slid 0.8 percent from May, following declines in January and March. The median forecast in a survey by Bloomberg was for a drop of 0.9 percent.
Weakness in consumer spending adds to risks to the world’s third-biggest economy, whose manufacturing sector has struggled with softness in exports to Asia. The task for Prime Minister Shinzo Abe is to convince companies to continue to boost wages to help consumers cope with a rise in living costs that the central bank sees picking up quickly this year.
“Consumers are hitting the brakes and I don’t think the economy is getting any upward momentum at all,” said Yasunari Ueno, the Tokyo-based chief market economist at Mizuho Securities Co. “I don’t see a strong, sustainable catalyst for growth. Exports are fragile, capital investment is limited.”
Mizuho and JPMorgan Chase & Co. are among those that estimate the economy contracted in the three months through June, ending a two-quarter rebound from last year’s recession. It may have shrunk as much as an annualized 2.5 percent, says Yoshiki Shinke at Dai-ichi Life Research Institute.
The yen was little changed at 123.58 per dollar at 9:34 a.m. in Tokyo while the Topix stock index rose 0.2 percent. Sales of machinery and equipment, automobiles, air-conditioners, apparel and accessories all fell in June, according to the economy ministry.
The Cabinet Office will release the second-quarter gross domestic product figures on Aug. 17. A record 62 percent of Japanese households described their livelihoods as “hard” last year, a health ministry survey on incomes showed earlier this month.
