Japan’s industrial production rebounds on resilient recovery

JAPAN’S industrial production rebounded in June amid a resilient economic recovery, capping a quarterly gain.

Factory output rose 2 per cent from the previous month, when it dropped 2.2 per cent, according to the industry ministry on Monday (Jul 31). Economists had forecast a 2.4 per cent gain. The gauge rose 1.3 per cent in the second quarter from the first one.

The data points to an ongoing recovery in the world’s third largest economy, 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.

Another report showed that retail sales fell 0.4 per cent in June from May, compared with a 0.7 per cent decline forecast by analysts. Outlays rose 5.9 per cent from a year ago.

A return of overseas tourists has been boosting consumption in Japan partly because the weaker yen increases their spending power. Last month the number of visitors from abroad was back to more than 70 per cent of pre-pandemic levels, returning to above 2 million, according to the Japan National Tourism Organization.

But domestic shoppers face mixed circumstances in that wages are growing while inflation continues to outpace a rise in their paychecks. Tokyo inflation came in slightly stronger than expected on Friday, while the latest readings for labour market data are due on Tuesday. BLOOMBERG