Do not believe in official statistics, Japanese retailers seem to be saying, as they cut earnings forecasts and warn of lackluster consumer spending, a key growth engine for Japan at a time when exports and factory output are stalling.
If you go by the larger-than-expected 2.9 percent gain in household spending in August – the first year-on-year rise in three months – then consumption looks like it is finally alive and well again, after a sales tax hike last year stifled the economy.
But profits of retailers suggest the spending data, which have a small sample size, have not captured the full picture. Restrained household consumption raises the stakes for a central bank policy meeting on 30 Oct., and for the government’s plan to flesh out new economic policies before the year-end.
(Source: The Japan Times Online)