Japanese Factory Production Grows in April Thanks to Capital Goods

Japan’s industrial production continued to grow in April as manufacturers benefited from a recovery in appetite for capital goods, especially in key overseas markets.

The world’s third-largest economy is expected to grow this quarter at a much slower pace than previously thought after the government extended anti-coronavirus measures in Tokyo and other key regions.

Separate data released today showed that retail sales, a key measure of consumer spending, grew in April, thanks to the impact of the base year when the country was subject to stricter measures to combat the Coronavirus a year ago.

Official data released today, Monday, showed factory production growth of 2.5% in April compared to the previous month, with the increase in the production of machinery and electrical appliances, which offset the contraction in the production of cars and transportation equipment.

The production increase was better than last month’s 1.7% increase, but far below expectations in a Reuters poll of analysts, and was for 4.1% growth as a result of a larger decline in auto production due to semiconductor supply problems.