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Investing.com-- Japanese industrial production shrank less than expected in April amid some resilience in local demand, which was also reflected in stronger-than-expected retail sales for the month.
Industrial production shrank 0.9% month-on-month in April, government data showed on Friday. The print was smaller than expectations for a 1.4% drop, although it did mark a reversal from a 0.2% rise in the prior month.
Industrial production was expected to decline as Japanese companies grappled with increased U.S. trade tariffs, which came into effect through April. U.S. President Donald Trump introduced 25% tariffs on automobiles and steel, as well as a universal 10% tariff in April.
The levies weighed heavily on U.S. demand for Japanese exports, in turn hurting local production. But some resilience in local demand, amid increased consumer spending, helped offset the full impact of the tariffs.
Trade talks between Japan and the U.S. are ongoing, with Tokyo demanding that Trump remove all tariffs against Japan.
Other data showed Japanese retail sales rose 3.3% year-on-year in April, more than expectations of 2.9% and higher than the 3.1% seen in the prior month.
The data reflected a strong pick-up in private consumption, especially after Japanese labor unions won another round of bumper wage hikes during springtime wage negotiations.
The wage hike is expected to boost private spending, at least temporarily, in the coming months.
But increased spending also translated into higher inflation. Data released earlier on Friday showed Tokyo consumer inflation grew more than expected in May, after an outsized reading for April.