Japan's retail sales rose more than forecast in May, as government subsidies for purchasing fuel efficient cars spurred sales of motor vehicles, data from the Ministry of Economy, Trade and Industry showed Thursday.
Retail sales rose 3.6 percent year-on-year in May, faster than the 3 percent increase forecast by economists. Retail sales have now increased for six straight months.
Nonetheless, data show that sales growth in May eased to a three-month low. This suggests slow growth in private consumption amid intensifying Eurozone woes.
According to the Ministry, motor vehicle sales climbed 47.3 percent year-on-year, but the annual rate of growth was weaker than April's 55.3 percent increase. Growth in fuel sales also eased to 2.2 percent from 7.5 percent in April.
Retail trade in food and beverages increased just 0.8 percent annually in May. During the month, there was a sharper fall in demand for machinery and equipment as sales fell 24.1 percent.
In its latest monthly report, the government warned of downside risks stemming from growing uncertainty about the economic situation in Eurozone, but reiterated that the economy is on the way to recovery at a moderate pace partly due to reconstruction-related demand.
The government also noted that private consumption is increasing at a moderate pace.
In April, the Bank of Japan had boosted the purchase of Japanese Government Bonds by 10 trillion yen, taking the size of the asset purchases authorization, excluding the credit facility, to 40 trillion yen by end-2013. The central bank abstained from announcing more stimulus in its latest policy review.
by RTT Staff Writer
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