— Japan May Retail Auto Sales +13.3% Y/Y Vs Apr Unrev +19.5%
— Japan May Retail Sales Also Pushed Up By High Fuel Prices

TOKYO (MNI) – Japanese retail sales rose 2.8% in May from a year
earlier, the fifth straight year-on-year increase, decelerating from the
4.9% gain in April, data from the Ministry of Economy, Trade and
Industry released on Monday showed.

High fuel prices as well as continued solid sales of motor vehicles
boosted overall retail sales. Fuels sales rose for the sixth consecutive
month from year-earlier levels while auto sales posted the 12th 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 this year, retail sales
rose 2.3%, posting the first y/y gain in 17 months.

The growth in May retail sales was led by increases in four out of
seven major categories: fuel (+18.9%), motor vehicle (13.3%), machinery
(+5.8%) and clothing (+3.0%)

Meanwhile, year-on-year declines were seen in sales at department
stores and supermarkets (-4.0%), other retail sales (-1.2%) and food and
beverages (-0.4).

The 18.9% rise in fuel sales in May was the sixth consecutive month
of y/y gains following revised +23.0% in April and +19.7% in March. 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 the week ended May 29, when they began to ease.

In the week to June 21, the average price of regular gasoline in
Japan fell to Y136.9 ($1.51) per liter, or $5.74 per gallon, from Y137.5
a week before, posting the fourth consecutive weekly drop.

The price was still much higher than the Y121.9 per liter of a year
earlier.

Motor vehicle sales posted the 12th 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 13.3% rise in auto sales in May was slowing from an unrevised
+19.5% in April, +14.8% in February and +21.0% in November 2009, which
was the largest y/y gain since March 1997, when vehicle sales were up
21.1%.

Sales of machinery and equipment gained 5.8% in May, marking the
ninth consecutive y/y gain after +13.8% in April, +13.1% in March, +8.7%
in February and +3.6% 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): May +1.3%, the third consecutive year-on-year rise,
following +3.6% in April, +2.4% in March and the record -24.3% marked in
May 2009.

Sales at the wholesale level (y/y): May +0.7%, also up for the
third consecutive year-on-year gain, and decelerating from +3.1% in
April, +1.5% in March and recovering from the record -30.3% hit in May
2009.

Large retail store sales on a same-store adjusted basis (y/y): May
-4.0%, the 26th straight y/y drop, vs. April -3.7%.

Large retail store sales, unadjusted (y/y): May -3.4%, the 22nd
consecutive y/y drop, vs. April -3.1%.

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

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