Japan Retail Sales Slow Sharply But Beat Forecasts

Japan’s retail sales growth slowed sharply in the latest reading, with year-on-year sales rising 1.0% versus 1.7% previously. This marks a 0.7 percentage point deceleration, a drop of roughly 41% in the growth rate, signaling weaker momentum in consumer spending.

Despite the slowdown, the 1.0% gain still topped analysts’ 0.9% estimate, suggesting demand remains slightly more resilient than expected. The data leans mildly positive for equities in consumer discretionary and retail-linked names, as it tempers fears of a sharper contraction in spending. At the same time, the softer trend may reinforce expectations for a cautious policy stance, supporting interest-rate sensitive sectors in the near term through sentiment rather than any immediate policy shift.