From Reuters over the weekend, warnings of slow wage growth, slow consumer spending and concerns over the next sales tax hike.

While the most recent household spending data from Japan (+2.9% y/y against the expected of +0.3%) seemed a positive, not so say Japanese retailers:

  • "Consumer spending has ground to a halt"
  • "Shoppers are tightening their purse strings ... There is a lot of uncertainty about consumer spending, and another sales tax hike is on the way. Women are cutting back on clothes."

Reuters highlight 3 problems:

  1. Wages are not rising fast enough to keep pace with rising food prices, and consumers are starting to cut back on other goods
  2. More and more workers are getting stuck in jobs with low pay
  3. Plans to raise the sales tax to 10% 2017 (currently 8%)


No surprises that retailers are against a sales tax hike, but apart from that they've got some valid concerns.

If recent history is any guide its going to the Bank of Japan that is looked to to provide solutions. Not ideal, but there you are.