In Markets

Japan retail sales grow at fastest pace in 17 years

Japanese retail sales rose in March at their fastest pace in 17 years as consumers went on a shopping spree before a national sales tax hike took effect on 1 April, setting the stage for a decline in consumer spending the following month.

The 11 percent annual increase in retail sales matched the median estimate and marked the fastest gain since the last time the government raised the sales tax in 1997, as consumers stocked up on electronics, toiletries and clothes to avoid paying higher prices.

The data suggest that in the immediate aftermath of the sales tax increase consumer spending will fall, but the decline will still be within the central bank’s expectations. Economists also expect sales to bounce back in May, meaning the economic recovery is unlikely to be derailed.

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