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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