Japan's retail sales fall as car sales drop
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.