Retail sales rose in September for the 11th consecutive month, but the growth rate slowed down compared to the previous month, which suggests that private consumption may not be strong enough to avoid a slowdown in economic growth.

The data also showed an unexpected decline in exports in September, which led to a noticeable slowdown in economic growth in July-September compared with the previous quarter. Analysts expect this slowdown to be temporary and caused by natural disasters, which in recent months have negatively affected business and consumer activity. However, the recession heightened concerns about the ability of the Central Bank to achieve inflation targets. The Bank of Japan is waiting for a new piece of data, including production and unemployment, to update its growth and inflation forecasts.

In the third quarter, GDP probably fell by 0.1 percent. Most likely, the Central Bank will slightly lower its growth and inflation forecasts for the current fiscal year. Private consumption, which accounts for about 60 percent of economic activity, is the key to accelerating inflation to a target of 2 percent. However, the head of the Bank of Japan said that it would take more time than originally expected to achieve this goal. Annual basic consumer inflation in Japan in September increased by 1 percent, which is the highest figure in the last seven months.