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Retail sales in Japan grew by 4% year-on-year in July 2026, exceeding market expectations for a 3% rise and accelerating from an upwardly revised 0.6% gain in the previous month. The latest reading also marked the fourth consecutive month of growth in retail activity, largely driven by a 16.2% surge (vs 16.3% in June) in sales for motor vehicles. At the same time, sales rebounded for machinery and equipment (6.3% vs -1.9%), general merchandise (3.1% vs -1.1%), medicine and toiletry stores (1.6% vs -0.1%), and food and beverages (1.1% vs -0.5%). In contrast, turnover declined only for fabrics apparel and accessories (-6.6% vs -14.4%). On a monthly basis, retail sales rose by 2.4% in July, recovering from a downwardly revised 3.9% decline in June, which was the steepest drop since April 2021.
