People looking at the Keihin industrial zone in Japan from an observation deck. — AFP
TOKYO: Japan’s industrial production rebounded in June, capping a quarterly gain that suggests a modest recovery continued in the second quarter.
Factory output rose 2% from the previous month, rebounding from the previous month and led by increases in cars and electronic devices, according to the industry ministry yesterday.
Economists had forecast a 2.4% advance. The gauge rose 1.3% in the second quarter from the first one.
The data points to an ongoing recovery in the world’s third largest economy helped by healing supply chains, despite slowdown signs abroad.
The nation’s trade balance swung to its first surplus since July 2021 last month, with exports holding up while imports slid on the back of falling fuel prices.
“The recent pick up in auto production is a positive factor,” said Chisato Oshiba, an economist at Dai-Ichi Life Research Institute.
“Car exports are also recovering, so I expect the gradual recovery trend will continue, though it won’t necessarily be the case for other machinery.”
Another report showed that retail sales fell 0.4% in June from May, compared with a 0.7% decline forecast by analysts. Outlays rose 5.9% from a year ago.
A return of overseas tourists has been boosting consumption in Japan compared to the previous year, partly because the weaker yen increases their spending power.
Last month the number of visitors from abroad was back to more than 70% of pre-pandemic levels, returning to above two million, according to the Japan National Tourism Organisation.
But domestic shoppers face mixed circumstances in that inflation continues to outpace the rise in their paychecks. Tokyo inflation came in slightly stronger than expected last Friday, while the latest readings for labour market data are due today.
“We see production hovering around the current level for the next two to three months, weak foreign demand and the benefits from healing supply chains roughly balance out,” said Bloomberg economists.
Overseas factors such as the impact from continued monetary policy tightening and further slowdowns in the Chinese economy could affect Japan as well. — Bloomberg
Save 30% for ads-free and full access now!
