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MNI 5 THINGS: Japan Jan Retail Hit by Weather, Up on Prices

By Max Sato
     TOKYO (MNI) - Key points from preliminary January retail sales released
Wednesday by the Ministry of Economy, Trade and Industry (METI).
     * Retail sales rose 1.6% in January, posting the third straight
year-on-year rise but coming in weaker than the MNI median economist forecast of
+2.0%. The pace of growth decelerated from +3.6% in December as the lingering
cold weather dampened demand for spring clothing and car sales slipped due to
fading effects of new models introduced earlier. The increase was led by high
prices of fuels and vegetables as well as solid demand for heaters, high-end
electric appliances and computers.
     * On the month, retail sales fell 1.8% on a seasonally adjusted basis in
January, the first drop in three months after +0.9% in December.
     * Looking ahead, officials see a similar trend in February.
     "Demand for spring clothing at department stores remained slow in February
due to lingering low temperatures while wealthy consumers continued to spend on
high-end watches and jewelry, leading to year-on-year gains in department store
sales through mid-February," Kazuhiko Manaka, director of METI's Office of the
Current Survey for the Service Industry, told MNI. "High prices of fuels and
vegetables appear to have continued supporting retail sales in February."
     * METI maintained its view that retail sales are "picking up moderately"
after upgrading it last month. Despite the 1.8% m/m drop in January, the
three-month moving average of retail sales rose 0.3% in November-January from
the previous three-month period.
     * Earlier this month, industry data showed department store sales fell 1.2%
in January for the second straight year-on-year drop as freezing temperatures
across Japan discouraged people from going shopping and heavy snowfalls
disrupted traffic and caused casualties in some regions.
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com
[TOPICS: MAJDS$,M$A$$$,M$J$$$,MT$$$$]

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