Japan’s retail sales fell in October by the most in 11 months as consumers purchased fewer cars and televisions, adding pressure on the government to stimulate an economy that may be entering a recession.
Sales fell 1.2 per cent from a year earlier, the Trade Ministry said in Tokyo on Thursday, after a 0.4 per cent advance in September. The median estimate of 10 economists surveyed by Bloomberg News was for a 0.8 per cent decline. From a month earlier, sales increased 0.7 per cent.
Weakening consumer demand is dragging on growth in the world’s third-largest economy before December 16 elections. Candidates from the two largest political parties have said they will implement additional spending to rekindle expansion after exports fell for a fifth month in October and wages stagnated.
“Japan’s consumption has been losing steam since September, when the government terminated subsidies for energy-efficient car purchases,” said Azusa Kato, an economist at BNP Paribas in Tokyo. “Weakening overseas demand has hurt employment and wages, discouraging spending,” she said.
Japanese stocks rose, with the Nikkei 225 Stock Average poised to rebound from Thursday’s loss after Goldman Sachs said shares will benefit from policy changes if the opposition wins next month’s election. The gauge was up 0.7 per cent at the 11:30am end of morning trading in Tokyo. The yen was little changed at 82.10 per dollar after touching a seven-month low of 82.84 last week.
The government has said it will announce a second round of stimulus tomorrow, tapping about 1 trillion yen (US$12.2 billion) in reserve funds. The plan would follow about 750 billion yen of stimulus announced last month.