Japan's retail sales rose at their fastest pace since the first quarter in September as investors began to shake off the effects of a consumption tax hike.
Retail sales rose 2.3 percent on year in September, above expectations for a 0.6 percent rise in a Reuters poll and up from a 1.2 percent rise in August, data showed on Tuesday. It marked the highest retail sales reading since March.
In April, the government raised the consumption tax to 8 percent from 5 percent to rein in the country's budget-to-GDP ratio. It was the first tax hike in 17 years.
Analysts have said the performance of Japan's economy over the third quarter will likely determine whether the government proceeds with a second tax hike to 10 percent in 2015.
However, some politicians want this plan to be delayed. On Monday, a top Japanese government official said, on condition of anonymity, that Prime Minister Shinzo Abe should delay a second tax hike until April 2017, Reuters reported.
Japan's Nikkei index opened 0.2 percent lower shortly after the data was released.