Trade Desk Thoughts - Japanese Retail Sales

Japanese Retail Sales Actual 0.7%, Expected 0.2%, Previous 2.0%

Release Explanation: Retail sales are the measure of the total sales of goods and services by retail stores in Japan. This is also an important part of figuring the country’s GDP. Retail sales are an important measure of consumer spending and inflationary pressures. Steady increases in retail sales apply significant inflationary pressures to consumer prices. With retail trade being the foremost indicator for consumer spending, this figure is extremely important in understanding the Japanese economy.

Trade Desk Thoughts: Retail sales in Japan have slowed in the year to August as higher prices of everyday items have forced consumers to curb spending. The Japanese economy is facing the fastest rate of inflation in the past decade. Most economists agree that the Japanese economy is in a recession as the country has seen lower exports due to the global financial crisis. Sales at department stores and at supermarkets also fell in the previous month. Tomorrow the statistics bureau will release the household spending data which is expected to decrease for the sixth month in a row.

Forex Technical Reaction: After gapping up on the open the yen closed the gap and currently is running into resistance at the 20 day SMA which also coincides with the LFB R1 pivot point at 106.68.

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