— Japan May Retail Sales -1.3% Y/Y Vs Apr -4.8%
— Japan May Retail Sales MNI Poll Median Forecast -2.2%
— Japan May Retail Sales Post 3rd Straight Y/Y Drop
— Japan May Retail Auto Sales -24.4% Y/Y; Apr Revised -37.8%
— Japan May Retail Machinery Sales +3.8% Y/Y; Apr -9.6%
— Japan May Retail Fuel Sales +1.3% Y/Y; Apr +1.0%

TOKYO (MNI) – Japanese retail sales fell 1.3% in May, marking the
third consecutive year-on-year fall, as the March 11 earthquake disaster
continued to dampen department store and car sales, data from the
Ministry of Economy, Trade and Industry released on Tuesday showed.

But the pace of the year-on-year drop slowed notably from -4.8% in
April and -8.3% in March as consumer sentiment is gradually recovering
and demand for energy-saving consumer electronics is strong.

Manufacturers are scrambling to restore wrecked production
facilities and supply chain networks while the government is trying to
rebuild the disaster zone and contain the nuclear radiation crisis.

The May reading came in better than the median forecast for a 2.2%
drop in a Market News International survey of economists.

Automobile sales fell 24.4% in May, with the pace of decline
decelerating from a revised 37.8% drop in April, which was a record
drop.

New vehicle sales fell 37.8% in May from a year earlier to 142,154
units, but the sales drop narrowed from -51.0% in April, which was the
biggest single-month decline on record, according to the Japan
Automobile Dealers Association.

Sales of machinery and equipment including consumer electronics
rose 3.8% in May, marking the first y/y rise in six months, after a 9.6%
fall in April.

The increase was led by strong demand for TVs and energy-saving
appliances such as electric fans as an alternative air conditioners, a
METI official told reporters.

Both businesses and households in eastern Japan have been urged
by the government to slash electricity consumption this summer in order
to prevent a massive blackout.

The March disaster knocked out the cooling systems for the
Fukushima Daiichi nuclear power complex, causing power supply shortages
in Tokyo and other cities.

The worst nuclear crisis since the 1986 Chernobyl meltdown has
prompted the shutdown of another nuclear power plant along the Pacific
coast while anti-nuclear protests are spreading across the country,
clouding prospects for resuming operations of other units that are
currently under routine safety inspections.

Meanwhile, fuel sales rose 1.3% in May from a year earlier, marking
the 18th consecutive y/y rise after a 1.0% gain in April.

Other details from the latest data:

Commercial sales, or combined sales at the wholesale and retail
levels (y/y): May +1.3%, the first y/y rise in three months, following
-2.6% in April.

Sales at the wholesale level (y/y): May +2.3%, the first y/y rise
in two months after a revised -1.7% in April.

Large retail store sales on a same-store adjusted basis (y/y): May
-2.4%, the third consecutive y/y fall, after -1.9% in April

Large retail store sales, unadjusted (y/y): May -1.3%, also the
three consecutive y/y fall, following -0.9% in April

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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