Japan's retail sales rose in February as shoppers spent more on food, drinks and clothes, suggesting rising wages and a tight labour market are supporting consumer confidence. bThe 1.6 percent annual increase in retail sales in February was slightly less than the median estimate for a 1.7 percent annual increase and follows a revised 1.5 percent annual increase in January.
Rising consumer spending makes it more likely that consumer prices will rise in the future, which could help the Bank of Japan reach its elusive 2 percent inflation target, although its ultra-easy monetary policy will still be in place for some time. "Consumer spending looks like it is at the beginning of a mild recovery," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
"The labour market is improving, which is supportive. There is a dip in durable goods spending, but spending on other items is gaining some momentum."