UPDATE 2-Japan retail sales log biggest rise in 13 yrs

(For more stories on the Japanese economy, click [ID:nECONJP])

* Government stimulus boosts sales of autos, electronics

* Gasoline price rises push up sales value

* Sales could fall sharply after stimulus wears off – analyst
(Adds more analyst quotes, details)

By Rie Ishiguro

TOKYO, March 29 (BestGrowthStock) – Japanese retail sales jumped the
most in 13 years in the year to February as government incentives
prompted shoppers to open their wallets, but some analysts
cautioned about the outlook as such stimulus measures taper off.

Retail sales rose 4.2 percent from a year earlier, more than
double a median market forecast for a 1.8 percent gain,
government data showed on Monday.

“Given the stagnant income situation, this sizeable rise in
retail sales is too good to be true,” said Seiji Shiraishi, chief
economist at HSBC Securities in Tokyo.

“Some stimulus measures will continue until April and others
will last until September. After these incentives expire, there
should be a big negative rebound in retail sales.”

February’s jump came as consumers continued to spend on
low-emission automobiles and electronics goods that are backed by
government subsidies, while recent rises in gasoline prices gave
an additional push to the overall value.

Economists also say the data is not very reliable because it
focuses on department stores and other big retailers, which
consumers have increasingly been shunning in recent years in
favour of specialty retailers and on-line shopping.

“The income and employment situation is severe, and we need
to watch their impact on sales,” said an official at the Ministry
of Economy, Trade and Industry.

Japan’s jobless rate has recovered to 4.9 percent after
hitting a record high last summer. But analysts say the
improvement in the job market will slow, with companies still far
from operating at full capacity and reluctant to hire new
workers.

While consumer spending is faring better than previously
thought, analysts expect the fading impact of stimulus measures
on domestic demand will curb overall economic growth early this
year. [ID:nTOE62802P]

Stocks

(Editing by Hugh Lawson and Chris Gallagher)

UPDATE 2-Japan retail sales log biggest rise in 13 yrs