Japanese retail sales drop for 16th month
By Tomoko A. Hosaka |
January 29, 2010, Friday
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Print Edition
Print Edition
JAPANESE retail sales declined for the 16th straight month in December, as consumers in the world's second-biggest economy stayed cautious amid falling wages and a lackluster job market.
Sales retreated 0.3 percent from a year earlier, following a 1.1 percent fall in November, the government said yesterday.
The results illustrate Japan's predicament. The country emerged from its worst recession since World War II last year, helped by growing demand from robust Asian economies. But its prospects are threatened by deflation, a resurgent yen and persistently weak domestic demand.
On Wednesday, the government said that exports grew for the first time in 15 months in December on robust Asian demand. Exports jumped 12.1 percent from a year earlier to 5.4 trillion yen (US$60 billion).
Asia-bound exports, which account for more than 50 percent of Japan's total shipments, surged 31.2 percent to 3 trillion yen, according to the government. Japan's exports to China soared 42.8 percent to 1.1 trillion yen on brisk sales of cars, plastics and organic chemicals.
"Asia is driving this improvement," said Goldman Sachs economist Chiwoong Lee. Goods of all types - from machinery to electronics - are benefiting, he said.
The Bank of Japan this week cited Asia's rapid growth in narrowing its forecast for economic contraction this year. It now projects gross domestic product to fall 2.5 percent this fiscal year through March, better than its previous prediction of a 3.2 percent decline.
On the deflation front, the BOJ predicts prices will keep falling for another two years. A rising yen also poses a problem for the country's exporters, whose competitiveness and overseas earnings take a hit.
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