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 in sales for motor vehicles. Sales also increased for machinery and equipment (6.3%), general merchandise (3.1%), medicine and toiletry stores (1.6%), and food and beverages (1.1%). In contrast, turnover declined for fabrics apparel and accessories (-6.6%). On a monthly basis, retail sales rose by 2.4% in July, rebounding from a downwardly revised 3.9% decline in June, which was the steepest drop since April 2021.