Japan's retail sales slip

Retail sales in Japan fell slightly in April from a year earlier, data showed on Monday, but economists stuck to the view that a recovery in consumer spending will help underpin firm economic growth.
Retail sales fell 0.6 percent in April, slightly below a median forecast by economists for a 0.5 percent decline. Economists blamed bad weather at weekends and recent falls in Tokyo share prices for dampening spending on items such as clothing, which fell 2.4 percent from a year earlier.
"Retail sales were a bit weaker than expected, probably because clothing did not sell as well as we had thought due to bad weather at weekends in April," said Mamoru Yamazaki, a senior economist at HSBC Securities Japan.
But he added: "Given favourable job and income conditions, I think consumption will likely recover ... Retail sales may be somewhat weak at the moment, but won't fall as a trend."
Compared with March, retail sales rose 0.1 percent on a seasonally adjusted basis, the Ministry of Economy, Trade and Industry said.
Retail sales have been on an uptrend for the past year due to a pickup in consumer spending and rises in the value of fuel sales stemming from higher oil prices.
Economists expect private consumption, which accounts for 55 percent of Japan's gross domestic product, to continue supporting economic growth, given improvements in wages and job conditions, although the pace of growth is seen slower than last year.
Gross domestic product data released earlier this month showed the economy grew at an annualised rate of 1.9 percent in the three months to March, exceeding market expectations, but sharply lower than the revised 4.3 percent annualised growth in October-December.
In March, the jobless rate stayed at its lowest in nearly eight years at 4.1 percent, unchanged from February.
Prospects for steady though more moderate growth have reinforced speculation that the Bank of Japan may raise short-term interest rates from around zero as early as July.
A Reuters/Jiji Press survey of 96 Japan-based economists, strategists and traders showed a big majority expect the BOJ to end its zero interest rate policy in the third quarter, with July 14 cited as the most likely date.
Overnight rates have already begun to inch higher and the BOJ conducted an unusual money market operation on Monday to keep the rate from rising above the official discount rate of 0.1 percent.
The output gap stood at plus 0.3 percent after a revised plus 0.2 percent in October-December, which was the first positive reading in nearly nine years, said Kiyosato Ishikawa, a researcher at the Cabinet Office.