TOKYO : Japanese factory output likely grew for a second straight month in April while retail sales picked up, a Reuters poll showed on Friday, highlighting budding signs of an economic recovery.
The rise in core consumer prices (CPI) in Tokyo areas, which become available a month earlier than nationwide, likely quickened in May.
Many analysts expect the economy to bottom out, returning to growth this quarter. The economy contracted an annualised 2 per cent in the first three months of this year as rising inflation driven by the weak yen made consumers more cautious about spending.
“A pick-up in transport equipment machinery will continue due to resumption of car factory activity. In addition, a recovery in demand overseas will help push up output of chip-making and other production machinery,” analysts at SMBC Nikko Securities wrote in a note.
The poll of 18 economists found factory output likely grew 0.9 per cent in April from a month earlier, following a 4.4 per cent gain in March.
The Tokyo-area May core CPI, which excludes fresh food prices, likely accelerated to a year-on-year rise of 1.9 per cent from 1.6 per cent in April due to an increase in renewable energy levy.
The CPI data, which serves as a leading gauge of inflation, will be published on May 31.
On Friday, separate government data showed the nationwide core CPI rose 2.2 per cent year-on-year in April, slowing a bit but remaining at or above the central bank’s 2 per cent target for more than two years, complicating the Bank of Japan’s efforts to raise rates further.
The central bank raised rates in March for the first time since 2007 in a landmark shift away from negative interest rates.
Data due on May 31 will likely show a steady jobless rate at 2.6 per cent, with 1.28 jobs available for every job seeker.
Year-on-year growth in retail sales likely accelerated to 1.9 per cent in April from 1.2 per cent in the previous month, broadly reflecting private consumption that accounts for more than half of the country’s economic output.
A slump in housing starts is expected to ease, with starts seen down 0.2 per cent in April from a 12.8 per cent slide in March.
Data on industrial output, retail sales and housing starts is due out on May 31.
From: channelnewsasia
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