2018.05.3001:14:00UTC+00Japan Retail Sales Rise in April

Japan's retail sales growth accelerated in April, surpassing estimates and following soft growth in the previous month.

Retail sales increased 1.6 percent year on year in April from one percent growth in March, according to the Ministry of Economy, Trade and Industry.

In month-on-month terms, retail sales grew 1.4 percent.

Capital Economics senior Japan economist Marcel Thieliant, called the growth “impressive” as consumer goods prices, in particular food prices, have fallen.

“We estimate that retail sales volumes jumped by 2.3 percent m/m and were the highest they have been since 2014's sales tax hike,” Thielant said. “Sales values in all other spending categories [other than food] increased as households seem to have used the windfall from lower food prices to raise spending elsewhere.”

Japan needs stronger consumption to support a recovery that's relied heavily on exports. Wages have been growing as companies hire more permanent, full-time workers, giving households more purchasing power. Increased spending would make Japan's recovery more durable while also aiding Bank of Japan Governor Haruhiko Kuroda in his quest to generate 2 percent inflation.