Japan retail sales beat expectations in Jan, industrial production slides

Investing.com-- Japanese retail sales grew more than expected in January as increased year-end shopping saw consumers look past persistent pressure from high inflation.

But Japanese industrial production shrank more than expected, hit chiefly by a slowdown in Toyota Motor's (NYSE:TM) (TYO:7203) automobile production after it suspended all sales from its small car unit, Daihatsu, over a safety scandal.

Retail sales rose 2.3% year-on-year in January, official data showed on Thursday. The reading was higher than expectations of 2%, but slowed slightly from the 2.4% growth seen in December.

The figure was driven chiefly by increased sales for large scale retailers, with department and discount stores seeing higher demand during the year-end holidays.

The reading, which is the 22nd straight month of retail sales growth for Japan, indicates that some facets of spending remained strong despite pressure from high inflation and a weak yen.

But the pace of growth in retail sales has slowed in recent months. 

On the other hand, Japanese industrial production sank 7.5% month-on-month in January, more than expectations for a decline of 6.7% and worse than the 1.4% increase seen in the prior month. 

Car making giant Toyota had suspended all output from its Daihatsu unit, after the small car maker was found to have faked safety tests for nearly four decades.