TOKYO- Japanese retail sales rose for a third month in May, reinforcing views that strong consumption will lead an economic rebound this quarter, although rising inflation poses a risk to household spending for the rest of 2022.
Retail sales rose 3.6 percent in May from a year earlier, government data showed on Wednesday, slightly higher than the median market forecast for a 3.3 percent gain.
It followed an upwardly revised 3.1 percent increase in April and marked the third month of advancement since March, when the government lifted all coronavirus restrictions on face-to-face services nationwide.
On a seasonally-adjusted month-on-month basis, retail sales advanced 0.6 percent in May, after a 1.0 percent growth in April.
Japanese consumers dined-out and took domestic trips during the “Golden Week” holiday season towards early May, enjoying the break without COVID-19 curbs for the first time since 2019.
The rebound in service consumption and the broader household spending likely boosted the world’s third-largest economy, with analysts in the latest Reuters poll expecting an annualized 4.1 percent growth in Japan’s gross domestic product this quarter after a 0.5 percent contraction in January-March.
However, the rising cost of living due to higher commodity prices and the yen’s decline to 24-year-lows have stoked fears Japan’s consumption-led recovery could be undermined throughout the rest of this year. — Reuters
