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Investing.com-- Japanese industrial production unexpectedly grew in June, with producers seeing some improvement in local and overseas demand despite headwinds from U.S. trade tariffs.
Retail sales also grew more than expected, reflecting resilience in consumer spending.
Industrial production grew 1.7% month-on-month in June, preliminary government data showed on Thursday. The print was stronger than expectations for a 0.7% contraction.
Retail sales grew 2.0% year-on-year, stronger than expectations of 1.8%.
Growth in industrial production came following two months of declines, as Japan’s factories grappled with increased U.S. tariffs, especially on automobiles and steel. But demand was still seen remaining steady despite the higher duties, especially as trade talks between Tokyo and Washington continued. The two agreed to a trade deal earlier in June, which will see Japan subject to a lower, 15% tariff.
Thursday’s strong retail sales data signaled that Japanese private consumption, a key driver of the economy, remained strong despite headwinds from sticky inflation and economic uncertainty.
Private spending has been a major driver of Japanese inflation in recent years, and was also a motivating factor for the Bank of Japan to hike interest rates.
The BOJ is set to leave rates unchanged at the conclusion of a meeting later on Thursday.