Japan retail sales boosted by tourism, up for 9th month

Japanese retail sales rose for a ninth straight month year-on-year in November as the lifting of Covid-19 border controls and the government’s domestic travel subsidy helped consumer demand.

But sales fell from October, with price increases in daily necessities weighing on Japanese households.

Japan’s consumer inflation rate hit a 40-year high, indicating price hikes were broadening.

Although they increased by 2.6 percent from a year earlier, retail sales did not meet the consensus projection of 3.7 percent. A measure of private consumption, the rate of annual sales growth decreased from 4.4 percent in October and 4.8 percent in September.

Retail sales decreased for the first time in five months in November as compared to the prior month on a seasonally adjusted basis, falling 1.1 percent.

In November, the first full month following the country's removal of Covid-19 limits that had essentially stopped tourism for more than two years, tourist arrivals to Japan increased to about 1 million.

A recovery in private consumption, which makes up more than half of Japan’s economy, is key to economic growth.

Japan’s economy unexpectedly shrank in the third quarter, with China’s faltering economy, a weak yen, and higher import costs hurting consumption and businesses.