Japan Retailers Bounce Back with 2% Sales Rise

Japan's large retailer sales have bounced back from last month's decline, increasing by 2% in July. This marks a return to growth after a revised 1% drop in June, according to data released by Japan's Ministry of Economy, Trade and Industry.

The recovery is seen as a modest improvement in consumer spending, which drives more than half of Japan's GDP. While the underlying trend remains uneven, retail activity appears to be stabilizing, despite persistent inflation and a soft labor market putting pressure on consumer confidence.

The rebound in large retailer sales aligns with a broader pattern of gradual improvement in Japan's domestic demand. Economists caution that one month of data does not confirm a sustained trend, but the Bank of Japan may take note as it weighs the strength of consumption against its inflation targets ahead of upcoming policy meetings.