Japan’s factory output rises, job availability at near 1-year high

TOKYO (Reuters): Japan’s factory output rebounded in June and job availability rose to the highest level in nearly a year, data showed, a sign robust overseas demand was offsetting the drag to consumption from the pandemic.

But retail sales were largely flat in June from a year earlier, suggesting any recovery in the world’s third-largest economy would be slower than other advanced nations.

The mixed batch of data comes as Tokyo hosts the Olympic Games amid a rise in coronavirus infections that forced the capital impose state of emergency curbs.

The renewed restrictions have dashed policymakers’ hopes of a strong rebound in July-September growth after an expected weak economic performance in the previous quarter.

Industrial output increased 6.2% in June from the previous month after a sharp 6.5% drop in May, data showed on Friday, compared with a median market forecast for a 5.0% gain.

Separate data showed Japan’s jobs-to-applicants ratio rose to 1.13 from 1.09 in May, exceeding market estimates for a 1.10 reading. The jobless rate fell to 2.9% from 3.0% in May.

Underscoring the weakness in consumption, retail sales were up just 0.1% in June from a year earlier, data showed, compared with a median market forecast for a 0.2% gain.

Japan’s economy shrank an annualised 3.9% in January-March and likely barely grew in the second quarter, as the pandemic took a toll on service spending.