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    Japan retail sales up for ninth month helped by tourism

    ANN/THE STRAITS TIMES – Japanese retail sales rose for a ninth straight month in November, data showed yesterday, as the lifting of COVID-19 border controls and the government’s domestic travel subsidy helped consumer demand.

    But sales fell from the previous month of October, with price increases in daily necessities weighing on Japanese households as the nation’s core consumer inflation rate hit a fresh 40-year high, indicating that price hikes were broadening.

    A recovery in private consumption, which makes up more than half of Japan’s economy, is key to driving growth.

    Retail sales grew 2.6 per cent from the year earlier but short of a median forecast of 3.7 per cent. The pace of annual growth in sales, a barometer of private consumption, slowed from 4.4 per cent in October and 4.8 per cent in September.

    On a seasonally adjusted basis, retail sales slipped 1.1 per cent in November from the previous month, down for the first time in five months.

    Data showed last week that visitor arrivals to Japan jumped to nearly one million in November, the first full month after the country scrapped COVID-19 curbs that effectively halted tourism for more than two years.

    Visitors at a shopping district in Japan. PHOTO: THE STRAITS TIMES

    A government domestic travel subsidy campaign, which started in mid-October, to help the pandemic-hit tourism industry also encouraged people to spend on travel and travel goods.

    Separate data showed that Japan’s jobless rate fell to 2.5 per cent in November, in line with a forecast in a Reuters poll, and down from 2.6 per cent in October.

    The jobs-to-applicants ratio, a key gauge of job availability, was at 1.35, unchanged from October and holding at the highest level since March 2020.

    Bank of Japan governor Haruhiko Kuroda on Monday voiced hope that intensifying labour shortages would prod firms to raise wages, while he brushed aside the chance of a near-term exit from ultra-loose monetary policy.

    A higher inflation rate could also prompt firms to shift towards wage increases. Canon plans to raise its base salary for the first time in 20 years, the Nikkei business daily reported on its website on Monday.

    Japan’s economy unexpectedly shrank in the third quarter as global recession risk, China’s faltering economy, a weak yen and higher import costs hurt consumption and businesses.

    The government last week revised up its growth forecast for the next fiscal year to 1.5 per cent, from a 1.1 per cent expansion in the previous forecast in July.

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