Japan retail sales plummet in March on sales tax increase

Japan retail sales plummeted in March.

Sales fell by 9.7% from a year earlier, below expectations for a drop of 7.3% and well below the 1.7% decline seen in the year to February.

While the chart below looks ugly, the sharp decline is largely a result of the sales tax increase that occurred in April 2014 – which saw sales surge in the months before as consumers brought forward spending.

Given this anomaly it is widely expected that retail sales will rebound strongly when the April figures are released in late May.

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