Japan's Retail Sales Growth and Tokyo Core Inflation Slows, Nikkei Rises Above 40K

Akira Ito
27 Jun, 2025
Tokyo

Japan's indexes advanced to multi-month highs amid improving sentiment and receding tensions about the prolonged trade war with the U.S. 

The Nikkei 225 Stock Average advanced more than 1.5%, and the broader Topix gained 1.2%, and for the week they advanced 5.3% and 3.3%, respectively. 

Tokyo stocks traded higher following gains in overnight trading in New York after the White House spokesperson confirmed that tariff deadlines are flexible and could be extended, contradicting repeated claims made by the U.S. president. 

Despite multiple claims by Donald Trump, not one trade deal has been signed by the Trump administration after three months of chaotic negotiations and conflicting assertions.

Over the last four months, Trump falsely claimed that several key trading partners are ready to set up manufacturing operations totaling more than $600 billion and avoid sky-high U.S. tariffs. 

On the contrary, the constant trade policy flip-flops have unnerved foreign investors and frozen possible direct investments as manufacturing companies assess the policy durability and stability. 

 

Japan's Retail Sales Growth Slowed In June

Japan's retail sales rose at a slower pace in June and expanded for the 38th consecutive month, according to a report released by the Ministry of Economy, Trade & Industry. 

Retail sales rose at the slowest pace since February, when sales expanded at an annual pace of 1.3%.

The sustained increase in consumption is driven by rising wages; apparel and personal goods sales soared 7.2%, and pharmaceutical and cosmetic sales advanced 4.6%, offset by sales decline in department stores by 6.1%.

 

Tokyo-Area Inflation Stays Above BOJ's Target Rate 

The Tokyo area's consumer price inflation advanced above 3% for the eighth consecutive month in June, the Statistics Bureau of Japan reported Friday. 

The Tokyo area's overall inflation slowed to an annual pace of 3.1% in June from 3.4% in May and stayed above the 2% target rate set by the Bank of Japan. 

Core inflation, which excludes volatile food but not energy prices, slowed to an annual rate of 3.1% in June from 3.6% in the previous month.

The largest metropolitan area's inflation gauge serves as a harbinger to the national inflation trend, and cooling but elevated inflation rates are likely to support the Bank of Japan's gradual approach in increasing interest rates in the months ahead. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average jumped 1.6% to 40,213.06, and the broader Topix advanced 1.3% to 2,840.84. 

Ocean shipping companies traded higher amid expectations that the temporary ceasefire between Iran and Israel is likely to hold. 

Nippon Yusen KK advanced 0.8% to ¥5,144.0, Kawasaki Kisen Kaisha Ltd. advanced 1.1% to ¥2,058.0, and Mitsui O.S.K. Lines Ltd. gained 0.4% to ¥4,856.0. 

Artificial intelligence-linked semiconductor equipment makers advanced following a surge in tech stocks in overnight trading. 

Tokyo Electron Ltd. jumped 4.5% to ¥27,575.0, Advantest Corp. decreased 1.1% to ¥10,580.0, and Disco Corp. jumped 6.7% to ¥41,700.0. 

Retailers were in focus after retail sales advanced for the 38th consecutive month in June. 

Seven & I Holdings declined 0.1% to ¥2,286.50, Fast Retailing Co. Ltd. advanced 1.4% to ¥49,190.0, Takashimaya Co. Ltd. gained 1.6% to ¥1,092.50, and Isetan Mitsukoshi Holdings edged up 0.4% to ¥2,205.0.