- Bank of Japan
Japan's retail sales declined 1.0% in November from October, marking the first drop in two months, reflecting weak sales of winter clothing due to relatively warm weather and a decrease in fuel sales due to lower gasoline prices. Economists, however, had predicted a 0.6% decrease. A separate data showed household spending suffered the biggest annual decline in eight months, falling 2.9% in November from a year earlier. The BOJ has signalled readiness to expand stimulus if risks threaten Japan's recovery prospects. While weak emerging market demand dims the export outlook, analysts expect output to gradually increase early in 2016 as automakers increase production of new models. Manufacturers surveyed by the trade ministry expect to ramp up production by 0.9% in December and raise it by 6.0% in January.
Meanwhile, the Bank of Japan expects the 2020 Tokyo Olympic Games to boost the world's third biggest economy by 0.2-0.2 of a percentage point on average each year until 2018, offsetting some of the pain from another sales tax increase planned in 2017. Investment on new hotels, venues and infrastructure related to the games and spending by tourists will boost Japan's gross domestic product by up to 30 trillion yen during 2015 to 2020, or roughly 6% the size of the economy.
© Dukascopy Bank SA