-Yukio Edano, Democratic Party of Japan Secretary-General
Retail sales in Japan rose for a third consecutive month in September, adding to signs that consumer spending might be robust enough to withstand a second sales tax increase planned for next year. Retail spending soared 2.3% on an annual basis in September following 1.2% increase in the preceding month, the Ministry of Economy, Trade and Industry reported. The reading topped analysts expectations almost four-fold, as they had predicted a modest 0.6% gain. On a month-to-month basis, sales surged 2.7% in September, triple the 0.9% estimate by markets, and followed a 1.9% advance in August sales.
Increasing consumer spending, after being hit by the effect of sales tax hike, is also a welcome sign for the Bank of Japan, as it tries to bring inflation to its goal of 2% next fiscal year to eliminate the risk of Japan slipping back into deflation. It also helps the Japanese government to push further with another lift of levy, as a decision by Japanese Prime Minister Shinzo Abe refrain from a planned sales tax hike next year would be equal to admitting that "Abenomics" for economic recovery was a failure, said a representative of the main opposition Democratic Party. The Finance Ministry, the Bank of Japan and major corporations urge Abe to raise the tax as planned next year to keep Japan's pledge to cut the biggest debt burden in the developed world.
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