Japan's Ministry of Economy, Trade, and Industry said that retail trade rose by 1.1% in June (month-on-month), above expectations of -1.7 percent and below the previous month’s 3.1%. In yearly terms, retail trade increased by 2.4%, higher than expectations of 2.1% and the previous month’s 0.1%.
Large retail sales increased by 1.3%, higher than expectations of 1.2% and after dropping by 2.3% in the previous month.
According to the data, demand for cars, general merchandise, clothes, and food increased. Sales also increased for small retail establishments, such as convenience and drug stores.
“The recent strength in retail sales is unlikely to last,” commented an analyst at Capital Economics. “The severe Delta wave now hitting the country coupled with an ever-expanding list of prefectures under states of emergency resulted in a renewed weakening in consumption this quarter.”
The government is currently attempting to stop the spread of the delta strain of the COVID-19 virus, which is believed to be more transmissible than other variants. Since the beginning of the pandemic, 1,434,370 COVID-19 cases have been reported in Japan, as well as 15,896 related deaths.
The government recently decided to extend the state of emergency to eight more prefectures because of the relatively quick spread of the delta variant and the increase in the number of critical cases, which is currently overwhelming the country's health system.
The vaccination campaign is also advancing, though the government has faced big challenges in this respect. At least two people have died because they were administered doses from a batch of Moderna vaccines that are believed to be contaminated. This made the government suspend the use of 1.63 million doses of the Moderna vaccine as a precaution.
So far, 127 million doses have been administered among the local population with 56.7 million individuals now fully vaccinated, accounting for 44,9 % of the total population.
Since the beginning of the week, the Japanese yen has advanced by 0.02% against the US dollar, breaking a two-week losing streak and closing Sunday's session at the 0.910150 level. By 09:33 GMT, the Japanese yen went up by 0.04% against the greenback, hitting the 0.910450 level.