Data published by the Ministry of Economy Trade & Industry (METI), showed that in November retail sales increased by 5.3% per annum, to 13.819 trillion yen. Economists had expected an increase of 5.1% per annum. Meanwhile, the October increase was revised to 4.1% per annum from 4.2% per annum. METI said that in November, the 21st consecutive month of expansion in retail sales was recorded. As for the sectors, the largest growth in November was recorded in the automotive sales sector (+11.3% per annum) and machinery & equipment (+11.3% per annum). Sales also increased in the food & beverage sector (+5.8% per annum), department stores (+4.8% per annum) and pharmaceutical & cosmetics (+3.9% per annum).
On a monthly basis, retail sales increased by 1%, partially offsetting the 1.6% drop in October.
Sales from large retailers increased by 1% compared to October and by 5% per annum. Commercial sales increased by 0.9% per annum and fell by 0.2% mom, while wholesale sales decreased by 0.7% per annum and 0.3% mom.
A separate report from METI showed that industrial production fell 0.9% in November after rising 1.3% in October. Consensus estimates suggested a 1.6% drop. In annual terms, industrial production fell by 1.4%, offsetting the October increase (+1.1%).
According to METI's forecast, industrial production will grow by 6% mom in December, but then fall by 7.2% mom in January.
Overall, the latest data pointed to the patchy nature of the economy's recovery from its summer slump. Meanwhile, the Bank of Japan looks for a solid return to overall growth to build its case for raising interest rates in the coming months. Most economists expect the Bank of Japan to raise rates by April. This month is seen as the most likely for such a move, as it would give the central bank time to assess the March results of annual wage negotiations, which is a key factor in determining whether Japan's inflation trend has reached a positive cycle.