"Japan's economy will probably head back to a gradual recovery from this quarter as external demand rebounds, while the government's stimulus may lend support from the second quarter"
- Azusa Kato, an economist at BNP Paribas SA
Retail sales in the world's third largest economy rose less than predicted, indicating weak domestic demand, the Trade Ministry said on Tuesday. On a monthly basis sales rose 0.1% from November, when they fell by 0.1%, but below analysts' forecasts for a 0.4% gain. Sales rose 0.4% from a year earlier. At the same time, sales from large retailers were flat on a yearly basis at 2.105 trillion, also topping expectations for a decline of 1.0% after rising 0.9% a month earlier. Weak consumer demand and a seventh consecutive fall in exports highlight the challenges faced by Prime Minister Shinzo Abe, who is trying to defeat the deflation and boost economic growth in the country.
"Japan's economy will probably head back to a gradual recovery from this quarter as external demand rebounds, while the government's stimulus may lend support from the second quarter," Azusa Kato, an economist at BNP Paribas SA in Tokyo, told Bloomberg before the report was released.
"There are few positive signs for private consumption," Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo, said before the report. "Employment and income conditions aren't improving much as wages aren't rising."
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