Japan’s retail sales rose 5.0 percent in the year to April, the first increase in four months, data showed on Thursday – bolstering the central bank’s view that consumer spending is slowly picking up to underpin a steady economic recovery. The positive data adds to signs of improvement in consumer confidence and eases pressure on the Bank of Japan to expand its massive stimulus program in the near-term horizon.
The increase fell slightly short of a 5.4 percent rise forecast in a Reuters poll and followed a 9.7 percent drop in March. The year-on-year numbers have been distorted by a surge in consumption leading up to last April’s sales tax hike and a subsequent downturn after the higher levy nudged the economy into mild recession last year.
Still, the pickup in retail sales is a welcome sign for policymakers, who hope that rising wages and the low cost of gasoline will boost households’ disposable income and prompt them to spend more. The BOJ revised up its assessment of the economy last week on signs of pickup in private consumption, signaling that it has no plan to expand stimulus any time soon.