Japan: May retail sales beat on broad-based tailwinds

Research evidence excerpt

Japan: May retail sales beat on broad-based tailwinds

J P M O R G A N Japan Economic Research

29 June 2026

Japan: May retail sales beat on

broad-based tailwinds

May retail sales rose 1.9% m/m sa, marking a third consecutive month of strong Economic and Policy Research

gains and coming in well above both JPM and consensus forecasts. Durable goods Takuho Morimoto

sales posted a robust increase, supported by replacement demand for home (81-3) 6736-6682

appliances, while non-durable spending was also solid. With auto sales still takuho.morimoto@jpmorgan.com

elevated following April’s motor vehicle tax cut and the expansion of subsidies for JPMorgan Securities Japan Co., Ltd.

clean-energy vehicles, retail sales are up 11.0%3m/3m saar—the strongest pace of

the post-pandemic period. This momentum points to another strong quarter for real

consumption. We forecast real spending growth of 1.2%q/q saar in 2Q, following

a 1.4% increase in 1Q. While the policy-driven boost to auto sales should gradually

fade, ongoing improvements in income conditions and government subsidies

aimed at cushioning inflation should keep consumption growth on a firm footing.

Within the details, home appliance sales surged 6.9%m/m sa in May. Industry data

point to strong air-conditioner demand, likely reflecting elevated replacement

activity ahead of next year’s regulatory changes. Auto sales also held up in level

terms, falling only 1.3% in May after a 14.9% surge in April. Among non-durables,

apparel sales rose 3.1% m/m sa, consistent with hotter weather boosting seasonal

purchases. Food sales increased 1.4% m/m, highlighting improving income

conditions and alleviating some concerns about persistently high food prices.

General merchandise sales—which are partly influenced by inbound tourism—