— Japan July Retail Sales Pushed Up By Automobile, Fuel Sales
— Japan July Retail Auto Sales +8.3% Y/Y Vs June Revised +12.5%
— Japan July Retail Fuel Sales +8.2% Y/Y Vs June +8.2%

TOKYO (MNI) – Japanese retail sales rose 3.9% in July from a year
earlier, the seventh straight year-on-year increase, following a revised
3.3% gain (preliminary +3.2%) in June, data from the Ministry of
Economy, Trade and Industry released on Tuesday showed.

Continued solid sales of motor vehicles and fairly high fuel prices
supported retail sales but the pace of y/y growth in those items have
been decelerating.

Auto sales rose for the 14th consecutive month from year-earlier
levels. Fuel sales posted the eighth straight y/y gain, although
gasoline prices have fallen in recent weeks.

Retail sales have recovered from -5.7% in February 2009, which was
the largest y/y drop in seven years. In January this year, retail sales
rose 2.3%, the first y/y gain in 17 months.

The growth in July retail sales was led by year-on-year increases
in six out of seven major categories: motor vehicles (+8.3%), fuel
(+8.2%), clothing (+7.6%), machinery and equipment including consumer
electronics (+6.4%), other retail sales (+4.1%) as well as food and
beverages (+1.8%).

Meanwhile, year-on-year declines were seen in sales at department
stores and supermarkets (-3.0%).

Motor vehicle sales continued to be supported by tax breaks and
subsidies for buying low-emission vehicles. The government will finish
providing subsidies in September but continue to reduce taxes on buying
and owning energy efficient cars and trucks.

But the 8.3% rise in auto sales in July was slower than the revised
+12.5% in June, +13.4% in May and +19.5% in April. The 21.0% rise in
November 2009 was the largest y/y gain since March 1997.

The 8.2% rise in fuel sales in June was the eighth consecutive
month of y/y gains after rising at the same pace in June. The rate of
growth has slowed sharply from +18.9% in May and +23.0% in April. The
9.0% rise in December 2009 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.

Retail gasoline prices were on a general uptrend from mid-January
2009 until May 31, 2010, when they began to ease.

In the week to Aug. 23, the average price of regular gasoline in
Japan fell to Y133.6 ($1.59) per liter, or $6.04 per gallon, from Y133.7
last week, the 13th consecutive weekly drop.

The price was still higher than the Y125.3 per liter price of a
year earlier.

Sales of machinery and equipment gained 6.4% in July, marking the
11th consecutive y/y gain, thanks to the government’s reward program for
purchases of greener consumer electronics including flat-screen TVs,
refrigerators and air conditioners.

The pace of y/y gains in this category accelerated from a revised
+4.7% in June and +5.9% in May but was slower than +13.8% in April.

Other details from the latest data:

Commercial sales, or combined sales at the wholesale and retail
levels (y/y): July +1.0%, the fifth consecutive year-on-year rise,
following +1.3% in June and recovering from the record drop of -24.3%
marked in May 2009.

Sales at the wholesale level (y/y): July -0.1%, the first y/y drop
in five months after +0.6% in June, and recovering from the record fall
of -30.3% hit in May 2009.

Large retail store sales on a same-store adjusted basis (y/y): July
-1.2%, the 28th straight y/y drop, vs. June revised -3.1%.

Large retail store sales, unadjusted (y/y): July -0.9%, the 24th
consecutive y/y drop, vs. June -2.4%.

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

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