Japan's factory output likely rebounded in June but retail sales soften: Poll

Japan's factory output likely rebounded in June but retail sales soften: Poll

Employees wearing protective face masks and face guards work on the automobile assembly line during
Employees wearing protective face masks and face guards work on the automobile assembly line during the outbreak of the coronavirus disease (COVID-19) at the factory of Mitsubishi Fuso Truck and Bus Corp. in Kawasaki

TOKYO: Japan's factory output likely rebounded in June from the prior month's drop, while retail sales growth was expected to slow as new coronavirus infections dampened consumer confidence, a Reuters poll showed on Wednesday (Jul 21).

The mixed data forecast comes as Tokyo prepares to host the 2020 Olympic Games opening ceremony on Friday amid widespread doubt among the public about the ability of Olympic organisers to control COVID-19 infections.

Ministry of Economy, Trade and Industry (METI) data set to be out at 8.50am on Jul 30 is expected to show industrial production grew 5.0 per cent month-on-month in June, bouncing from a sharp 6.5 per cent drop in May, according to a Reuters poll of 15 economists.

Robust overseas demand has underpinned exports and factory output, which have been a bright spot for the world's third-largest economy over the past months, despite May's slump which was due to a sharp fall in car production.

"As production adjustments at some factories of carmakers are expected to continue from July onward due to the prolonged impact of the chip shortage, there remains a downside risk to car output," said Junpei Fujita, an economists at Mitsubishi UFJ Research and Consulting.

Japan's economy likely avoided falling into recession in the second quarter but a fresh state of emergency in Tokyo to halt a rise in coronavirus infections is hurting the growth outlook, a separate Reuters poll showed this month.

Separate trade ministry data due at 8.50am on Jul 30 is expected to show retail sales edged up 0.2 per cent year-on-year in June, slowing substantially from the previous month's sharp 8.3 per cent gain.

Job availability and the jobless rate were projected to come in little changed in June, at 1.10 and 3.0 per cent respectively, while housing starts were expected to see a 7.2 per cent jump in June, slowing from a 9.9per cent rise in the prior month, the poll showed.

Job data will be released by the labour ministry at 8.30am on Jul 30  and housing starts data will be issued at 2pm on Jul 30.

Source: Reuters/ga

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