Fast Retailing Co Ltd, the parent company of Uniqlo, reported a 16 percent increase in first-half profit and raised its full-year outlook, citing signs of recovery in China and strong sales growth in Europe and North America.

The results reflect the growing evidence that Chinese consumer spending is rebounding after long Covid-19 lockdowns took their toll on the world’s second-largest economy.

In contrast, in Japan, where Uniqlo's has had a long success, profit slipped almost 2 percent even as revenue climbed, as a weakened yen currency raised the cost of sales.

Fast Retailing gave corporate Japan a jolt this year when it said it would raise wages by as much as 40 percent, sending a clear signal that rock-bottom salaries were starting to budge after decades of deflation and cost-cutting, as Japan ran the risk of not being able to secure human resources if it did not start paying younger people more.

Fast Retailing's overall wage costs rose 23 percent from the same period last year.

The company raised its forecast for full-year profit to 360 billion yen from 350 billion yen.