— Japan Retail Sales Post 2nd Y/Y Rise In Row After 17 Drops
— Feb’s +4.2% Largest Y/Y Gain In 13 Years
— Japan Feb Retail Auto Sales +15.0% Y/Y Vs Jan Revised +13.1%

TOKYO (MNI) – Japanese retail sales surged 4.2% in February from a
year earlier, marking the second straight year-on-year rise after a
revised +2.3% (preliminary +2.6%), which was the first y/y gain in 17
months, data from the Ministry of Economy, Trade and Industry released
Monday showed.

Higher costs of gasoline and heating oil as well as continued solid
sales of motor vehicles supported overall retail sales. Fuels sales rose
for the third consecutive month from year-earlier levels while auto
sales posted the ninth straight y/y gain.

Retail sales have recovered from -5.7% in February 2009, which was
the largest y/y drop in seven years. In January 2009, retail sales
dropped 2.4% y/y.

The 4.2% rise in February 2010 was the largest gain since +12.4% in
March 1997, which was boosted by rush purchases before the sales tax
hike to 5% from 3% the following month.

Excluding this special factor, the February rise was the sharpest
rise since +4.7% in February 1992, when sales were pushed up by
leap-year effects, and +4.4% in January 1992.

The growth in February retail sales was led by increases in five
out of seven major categories: fuel (+20.7% y/), motor vehicles
(+15.0%), machinery (+8.6%), clothing (+8.4%) and food and beverages
(+0.5%).

Meanwhile, year-on-year declines were seen in sales at department
stores and supermarkets (-4.5%) as well as other retail sales (-2.3%).

The 20.7% rise in fuel sales in February was the third consecutive
month of y/y gains following +11.2% in January and +9.0% in December,
which was first year-on-year gain in 15 months. Fuel sales have
recovered from the record y/y drop of 23.3% marked in February 2009.

Motor vehicle sales posted the ninth straight month of y/y gains as
demand for passenger cars continued to be supported by tax breaks and
subsidies for buying low-emission vehicles.

The 15.0% rise in auto sales in February accelerated from a revised
+13.1% in January and +14.5% in December, but was slower than +21.0% in
November 2009, which was the highest level since March 1997, when
vehicle sales were up 21.1%.

Sales of machinery and equipment also gained 8.6% in February,
marking the sixth consecutive y/y gain after a 3.6% rise in January,
thanks to the government’s reward program for purchases of greener
consumer electronics including flat-screen TVs and refrigerators.

Other details from the latest data:

Commercial sales, or combined sales at the wholesale and retail
levels (y/y): Feb -0.6%, the 17th consecutive month of y/y drops, vs.
Jan -3.8% and the record -24.3% marked in May 2009.

Sales at the wholesale level (y/y): Feb -2.3%, also down for the
17th consecutive month, vs. Jan a revised -6.1% and the record -30.3%
hit in May 2009.

Large retail store sales on a same-store adjusted basis (y/y): Feb
-3.4%, the 22nd consecutive month of on-year drops, vs. Jan revised
-5.1%.

Large retail store sales, unadjusted (y/y): Feb -4.0%, the 18th
straight monthly drop, vs. Jan revised -5.7%.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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