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Japan industrial output rises as retail spending cools in June

Industrial production climbed 1.3% month over month in June, while retail sales fell 4.1% month over month, the steepest drop since April 2021.

Reported · Written up by our desk · Major Pairs

Japan’s industrial production grew for a third straight month in June, highlighting an improving manufacturing backdrop, while household demand showed signs of weakening, according to Action Forex.

Industrial output rose 1.3% month over month, after 0.1% in May, and beat expectations of 0.7%. On a year over year basis, output increased 4.2%, reversing May’s 2.1% decline, the fastest annual growth in nearly four years.

The factory improvement appeared broad, with production machinery rebounding 7.6% after a 3.5% drop in May, and electrical machinery and information and communication electronics rising 5.8% following a 5.1% decline. Manufacturers stayed optimistic, projecting production to increase 1.2% in July and a further 4.5% in August.

By contrast, retail sales rose only 0.5% year over year, slowing from a revised 5.0% and below expectations of 3.1%, and fell 4.1% month over month, the steepest monthly decline since April 2021. Action Forex said weakness was widespread outside areas like automobile sales, with declines in food and beverages, department stores, machinery, fuel, and pharmaceuticals, suggesting Japan’s recovery remains uneven.

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