Japan’s industrial production and retail sales figures exceeded expectations in October, signalling a tentative recovery in demand as businesses and consumers continue to adjust to the April sales-tax hike.
Industrial production rose 0.2 percent on month in October, above expectations for a 0.6 percent decline in a Reuters poll but down from September’s 2.7 percent increase. Meanwhile, retail sales rose 1.4 percent on year, above expectations for a 1.2 percent rise but slower than September’s 2.3 percent increase.
In April, the government raised the consumption tax to 8 percent from 5 percent to rein in the country’s budget-to-GDP ratio. It was the first tax hike in 17 years.
The Japanese economy struggled to deal with the tax hike’s impact on demand, prompting markets to call on the Bank of Japan to pursue fresh stimulus measures. At the end of October the central bank did just that, expanding its already massive stimulus in an effort to re-energize a fragile economic recovery.