Japan Retail Sales Grows For Third Consecutive Month

Japanese retail sales growth accelerated for the third straight month in September in an encouraging sign that consumer spending could be strong enough to absorb a second sales tax increase scheduled for next year.

The 2.3 percent annual rise blew past a 0.6 percent increase expected by economists in a Reuters poll and marked the biggest gain since March. It followed a 1.2 percent rise in August.

Consumer spending has disappointed since the government raised the sales tax once in April, so evidence that a durable turnaround is imminent could make it easier for Tokyo to go ahead with a second hike in the tax to boost revenue for welfare spending.

 
Rebounding consumer spending is also a welcome sign for the Bank of Japan, as it tries to guide inflation to 2 percent some time next fiscal year to eliminate the risk of Japan falling back into deflation.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza