Mixed Data from Japan

Japan’s economy offered a mixed reading Monday, with retail sales for May beating expectations while industrial production disappointed.  Industrial output fell 2.2 percent on month in May, worse than a Reuters poll forecast for a 0.8 percent decline. That spurred the government to say industrial production is stagnating and cut its forecast, according to Reuters.

“The plunge in industrial production in May points to a contraction in gross domestic product (GDP) this quarter,” Marcel Thieliant, a Japan economist at Capital Economics, said in a note Monday. “The Bank of Japan will have to step up the pace of easing before too long.”

But Japan’s consumers have stepped up to the plate, with retail sales rising 3.0 percent on year in May, beating a forecast for a 2.3 percent rise from a Reuters poll. That’s consistent with data released last week showing household expenditures climbed more than expected in May.