Japan retail sales disappoint in Oct as inflation, weak yen bite By Investing.com
Economic Indicators 24 minutes ago (Nov 28, 2022 07:10PM ET)
By Ambar Warrick
Investing.com– Japanese retail sales grew less than expected in October, data showed on Tuesday, as rising inflation, slowing economic growth and a severely weakened yen weighed heavily on consumer spending.
Retail sales grew 4.3% from last year in October, data from the Ministry of Economy, Trade and Industry showed. The reading was below expectations for growth of 5%, and also came in below September’s reading of 4.8%.
The data follows a string of weak economic readings for October and November, as the Japanese economy faces increased headwinds from high inflation and a weakening yen.
Inflation in the country’s capital grew more than expected to a 40-year high in November, heralding a similar increase in nationwide inflation. Japanese consumer inflation also surged to a 40-year high in October, severely crimping the spending power of local consumers.
The world’s third-largest economy has been struggling with more expensive fuel and food imports this year, as a growing rift between local and U.S. interest rates saw an increasing amount of traders dump the yen.
The beleaguered currency is trading down nearly 20% for the year, and had earlier hit a 32-year low. The yen rose 0.2% on Tuesday, amid some speculation that worsening economic conditions could push the Bank of Japan into eventually raising interest rates from ultra-low levels.
Tuesday’s reading bodes poorly for the Japanese economy, given that retail spending is a key driver of growth. It also indicates that Japanese businesses may have to contend with slowing sales in the near-term, as local and international demand dries up.
A separate reading showed that Japan’s unemployment rate remained steady at 2.6% in October, disappointing market expectations for a drop to 2.5%.
Japan’s benchmark Nikkei 225 index sank 0.7% after the data.
Japan retail sales disappoint in Oct as inflation, weak yen bite
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