Japan retail sales disappoint in Oct as inflation, weak yen bite
2022.11.28 19:31
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© Reuters.
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.
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 .
grew more than expected to a 40-year high in November, heralding a similar increase in nationwide inflation. Japanese also surged to a 40-year high in October, severely crimping the spending power of local consumers.
The unexpectedly contracted in the third quarter, recent data showed, while for November showed that this trend is likely to continue in the fourth quarter.
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 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 remained steady at 2.6% in October, disappointing market expectations for a drop to 2.5%.
Japan’s benchmark index sank 0.7% after the data.
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