More steep drops for Japan vehicle sales show recovery weakness
Declines in Japanese motor vehicle sales hardly improved in August, adding to signs consumers remain cautious even as the spread of the coronavirus eases.
Sales of cars, trucks and buses slid 18.5% from a year ago, compared with a 20.4% drop in July, the Japan Automobile Dealers Association reported Tuesday.
The current sales slump bottomed in May, with a 40.2% drop, but the recovery has moderated in recent months after an initial bounce that came after the government lifted a nationwide state of emergency.
The continued weakness despite cash handouts from the government illustrates the fragility of Japan’s consumer spending recovery.
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With Prime Minister Shinzo Abe last week announcing his resignation due to health issues, his successor will have no choice but to maintain or even add to stimulus to prevent consumption from plunging again, according to economist Hiroaki Muto at Sumitomo Life Insurance Co.
“The recovery in consumption has been weaker in Japan than in other nations like the US," Muto said. “Nobody can try to tighten fiscal policy for now."