TOKYO, April 28 (Reuters) - Japanese retail sales rose at the fastest pace in five months in March as consumer demand recovered from the huge hit it took from the coronavirus pandemic last year.
The world’s third-largest economy has emerged from last year’s slump on an export recovery, though a glacial vaccine rollout and a resurgence in infections are threatening households’ spending appetite.
Retail sales jumped 5.2% in March from a year earlier, government data showed on Wednesday, a larger gain than the median market forecast for a 4.7% rise.
That marked the fastest rise since a 6.4% advance in October and the first positive growth in four months.
“People felt relaxed as it was becoming spring,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“They were going out to shopping streets and commercial facilities, leading to more consumption.”
Compared with the previous month, retail sales rose 1.2% on a seasonally adjusted basis.
The broader rise in retail sales was driven by higher spending on fashion items such as clothing and accessories as well as general merchandise, the data showed.
In March last year, retail sales plunged after the health crisis forced shops including department stores to shut their doors, causing demand for household appliances, clothing and other items to tumble.
Analysts now remain especially worried about a hit to spending on services, such as restaurants and leisure activities, after Japan last week declared a third state of emergency for Tokyo and three other prefectures to contain the pandemic.
“Services spending accounts for about half of consumption. If it won’t be going on an uptrend, overall consumption will stagnate,” said Minami.
(Reporting by Daniel Leussink; Editing by Sam Holmes)
Source: Reuters