Japan's retail sales recovering

28 June 2011 Last updated at 01:03 GMT Japanese consumers have refrained from spending in the aftermath of the earthquake and tsunami Retail sales in Japan fell less-than-forecast in May as the country starts to recover from the 11 March earthquake and tsunami.

Retail sales fell 1.3% in May compared with the same month last year, according to the latest government data.

However, compared with the previous month, retail sales rose by 2.4%.

Analysts said that the numbers were an indicator that the Japanese economy was starting to recover.

"The pace of decline has slowed, reflecting a quick recovery from the damage to supply chains," said Hioshi Miyazaki of Shinkin Asset Management Company.

Natural factor

While improving supply chain conditions have played their part in better output from Japanese factories, analysts said that natural factors such as the weather was also playing a part.

"Summer clothing seems to have sold well due to the hot weather in May," said Junko Nishioka of RBS Securities.

"This trend may continue in June and beyond," she added.

Mari Iwashita of SMBC Nikko Securities added that a change in weather may have a positive affect, not just on retail sales but also on other areas of the economy.

"A hot summer could result in more spending, especially with corporations allowing employees to take longer summer holidays." said Mr Iwashita.

"The picture may not be bad if summer bonuses are spent domestically, such as on travel," he added.

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Japan's car production plunges

27 May 2011 Last updated at 07:21 GMT Carmakers have been amongst the hardest hit businesses by the earthquake and tsunami in Japan Japanese car production plunged in April as manufacturers continued to face a shortfall in parts supply.

Toyota, the world's biggest carmaker, said its domestic production fell 74.5% compared with the same month last year.

Honda's Japanese output plummeted 81%, while Nissan reported a 48.7% decline at its factories in Japan.

Japan's carmakers have been facing a shortage of parts as the 11 March earthquake and tsunami disrupted the country's supply chain.

As a result, the country's top car manufacturers have been forced to suspend or slow down production at their factories.

Global impact

The effects of the disruption in Japan's supply chain have been felt well beyond the country's shores.

Leading Japanese carmakers have reported a sharp drop in their global production numbers as well.

Toyota Motors, which has curbed production at its plants in various countries, said its factories outside Japan produced 25% fewer vehicles in April.

Honda Motors has reported a decline of 43.5% in output at its overseas factories, while Nissan Motors said its foreign output dipped by 12.7%.

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