In October retail sales in the world’s third largest economy plummeted by the most for almost a year.
According to the Tokyo based Trade Ministry, after September’s gain of 0.4 per cent sales dropped in October by 1.2 per cent from a year earlier, the largest decline for eleven months.
This drop was triggered by a tailing off in car and television purchases and proved notably steeper than predicted by economists.
Although sales did increase by 0.7 per cent from September, the report showed a 3.5 per cent drop in motor vehicle sales from a year earlier whilst retail sales by equipment and machinery businesses fell by 5.8 per cent.
Purchases of flat screen televisions were particularly low, reflecting last week’s credit rating cuts of major television producers Panasonic Corp and Sony Corp.
The median estimate of surveyed economists was for an overall decline of 0.8 per cent decline.
An economist with BNP Paribas SA stated: ‘Japan’s consumption has been losing steam since September, when the government terminated subsidies for energy-efficient car purchases.’ Azusa Kato went on to say: ‘Weakening overseas demand had hurt employment and wages, discouraging spending.’
And of course the situation hasn’t been helped by ongoing tensions with China, one of Japan’s largest car markets, regarding a territorial dispute.
It is now predicted that Japans economy may decline by 0.4 per cent in the fourth quarter, taking the nation into a technical recession.
Prior to the elections on December the 16th the government has announced that it intends to outline a second round of stimulus tomorrow involving reserve funds of 1 trillion Yen.
As of 12:00 pm
The Pound to Euro exchange rate is currently trading at 1.2331
The Pound to US Dollar exchange rate is currently trading at 1.6018
The Pound to Australian Dollar exchange rate is currently trading at 1.5314
The Euro to US Dollar exchange rate is currently trading at 1.2986
The Euro to Pound exchange rate is currently trading at 0.8107
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