Japan's retail sales likely improved m/m in April

Japan will release retail sales data on 28 May. Retail sales growth is expected to have improved to 1.8% m/m (6.3% y/y) in April, from a decline of 1.9% m/m (-9.7% y/y) in March. 

Recovery in retail sales following the April 2014 sales tax hike has been anaemic. Even a year after the sales tax hike, Japanese consumers remain shy of spending, especially on durable goods. 

"The recent wage hike seems to be helping little, and we maintain our view that wage growth this spring has been too low to shore up private consumption, as expected by the Bank of Japan", says Standard Chartered.

A silver lining in retail sales is booming tourism, thanks to the weak Japanese yen. In Q1, total foreign visitors to Japan increased 44% y/y, which supported retail sales.