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     TOKYO (MNI) - Japan's retail sales were sluggish in May due to fewer public
holidays compared to a year before and cooler weather after unusually high
temperatures boosted demand for summer clothing in April, preliminary data
released Thursday by the Ministry of Economy, Trade and Industry (METI) showed.
     The key points from the latest retail sales data:
     * Retail sales rose 0.6% on year in May for the seventh straight
year-on-year rise, coming in weaker than the MNI median economist forecast for
+1.0%. The pace of growth decelerated from +1.5% in April and was much slower
than the recent peak of +3.6% in December 2017.
     * The modest increase was supported by recent gains in the prices for food
and beverages as well as fuels, compared to year-earlier levels. Sales of fuels
accelerated to +13.4% y/y in May from +10.9% in April while those of food and
beverages rose 0.8% y/y in May after +0.6% in April.
     * On the other hand, sales of apparel slumped 4.1% on year, the second
year-on-year drop while those of vehicles posted the fifth straight y/y decline,
down 2.8%.
     * On the month, retail sales fell 1.7% on a seasonally adjusted basis in
May, the first drop in three months after +1.3% in April. The three-month moving
average slipped 0.3% from the previous three-month period in May, marking the
first drop in two months.
     * METI maintained its view that retail sales are flat. In February, it
downgraded its view for the first time since January 2016. Previously, it said
retail sales had been picking up moderately.
     * Earlier this month, industry data showed department store sales fell 2.0%
in May for the first year-on-year drop in three months in payback for strong
demand for summer clothing in April. There were two public holidays in May,
compared to three a year earlier. Despite the drop in overall sales, the Japan
Department Stores Association noted that spending by tourists from overseas
continued to post double-digit percentage gains on year and that sales to
wealthy consumers remained solid.
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: