ECONOMIC GROWTH - TOKYO. Japan's industrial output rose in April, helped by the production of general purpose and electrical machinery, in a sign manufacturers continued to benefit from a recovery in appetite for goods in the United States and China.
The world's third-largest economy is expected to grow in the current quarter at a much slower pace than previously thought after the government extended coronavirus emergency measures in Tokyo and other major areas.
Separate data on Monday showed retail sales, a key gauge of consumer spending, surged in April, thanks largely to favourable statistical base effects from a year earlier, when the country was under an even stricter coronavirus curbs.
Official data released on Monday showed factory output grew 2.5% from the previous month in April, as higher production of general-purpose and electrical machinery offset a contraction in cars and transportation equipment output.
The rise in output was better than the previous month's 1.7% gain, but much weaker than a 4.1% advance forecast in a Reuters poll of economists as car production fell largely due to supply issues with semiconductor chips.
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Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to shed 1.7% in May, followed by a 5.0% rebound in June.
The government kept its assessment of industrial production unchanged, saying it was picking up.
Factory output had posted a surprise increase in March, as a jump in car production helped keep the economic recovery on track.
Some analysts worry that Japan's economy could fall into recession in the current quarter, after the government extended a COVID-19 emergency for Tokyo and other major areas until June 20, which is hurting consumer spending.
After emerging from last year's slump, the economy contracted in the first quarter as a slow vaccine rollout and repeated emergency measures put in place to halt a resurgence of infections dealt a blow to consumption.
In April, retail sales soared 12.0% compared with the same month earlier, the government said on Monday, mainly due to statistical base effects.
Compared to the previous month, retail sales shed 4.5% on a seasonally adjusted basis, as consumer sentiment struggled with the most recent measures to stem a halt in coronavirus infections.
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