August 3 - Fast Retailing said on Tuesday that sales at Japan outlets of its Uniqlo chain surged 11.2 percent in July, its highest percentage gain in over 1-1/2 years, as hotter summer weather and a government campaign to encourage people to wear cooler clothes lifted demand.

Consumers walk past the Uniqlo Co. flagship clothing store in the upscale Ginza district of Tokyo. - photo: corbis

Last month, the apparel maker said it had begun to see a pick up in spending at the over 800 casual-clothing locations it runs in its home market, after sales fell 1.9 percent year-on-year during the March-May quarter.

Japan's March 11 disaster and ensuing power crisis forced businesses to curtail operating hours and prompted consumers to curb spending, but as life returned to normal, consumption kicked in.

In addition, Japan retailers are eyeing an extra spending boost from a government campaign, dubbed 'Super Cool Biz', to get office workers to swap suits for lighter garments amid lower air conditioning usage due to power shortages.

Fast Retailing has projected a 3 percent year-on-year increase in same-store sales at its Japan Uniqlo stores for the second half of its business year that ends in August, after sales fell 9.9 percent in the first half.

Prior to Tuesday's announcement, shares of Fast Retailing settled down 0.3 percent at 13,970 yen, against a 1.2 percent decline in the benchmark Nikkei average.

(Reporting by James Topham; Editing by Joseph Radford)