Ja­pan's re­tail sales fall as car sales drop

The Pak Banker - - Front Page -


Ja­pan's re­tail sales fell in Oc­to­ber by the most in 11 months as con­sumers pur­chased fewer cars and televisions, adding pres­sure on the government to stim­u­late an econ­omy that may be en­ter­ing a re­ces­sion.

Weak­en­ing con­sumer de­mand is drag­ging on growth in the world's third-largest econ­omy be­fore Dec. 16 elec­tions. Can­di­dates from the two largest po­lit­i­cal par­ties have said they will im­ple­ment ad­di­tional spend­ing to rekin­dle ex­pan­sion af­ter ex­ports fell for a fifth month in Oc­to­ber and wages stag­nated.

"Ja­pan's con­sump­tion has been los­ing steam since Septem­ber, when the government ter­mi­nated sub­si­dies for en­ergy- ef­fi­cient car pur­chases," said Azusa Kato, an econ­o­mist at BNP Paribas SA in Tokyo. "Weak­en­ing overseas de­mand has hurt em­ploy­ment and wages, dis­cour­ag­ing spend­ing," she said.

Ja­panese stocks rose, with the Nikkei 225 Stock Av­er­age poised to re­bound from yes­ter­day's loss af­ter Gold­man Sachs Group Inc. said shares will ben­e­fit from pol­icy changes if the op­po­si­tion wins next month's elec­tion. The gauge ended the day up 1 per­cent at the 3:00 p.m. close in Tokyo. The yen fell 0.1 per­cent to 82.16 per dol­lar af­ter touch­ing a sev­en­month low of 82.84 last week.

The government has said it will an­nounce a sec­ond round of stim­u­lus to­mor­row, tap­ping about 1 tril­lion yen ($12.2 bil­lion) in re­serve funds. The plan would fol­low about 750 bil­lion yen of stim­u­lus an­nounced last month.

Op­po­si­tion leader Shinzo Abe to­day called for un­lim­ited mon­e­tary eas­ing and pub­lic spend­ing to cre­ate in­fla­tion ex­pec­ta­tions, which would drive down the yen, boost stock prices and even­tu­ally lead to in­creased con­sump­tion and ris­ing ex­ports. The Nikkei sur­vey was car­ried out by tele­phone be­tween Nov. 26-28 and gained 865 valid re­sponses. The pa­per didn't give a mar­gin of er­ror.

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