Japan's Industrial Production rebounds modestly in May - BNP Paribas

FXStreet (Łódź) - Raymond Van Der Putten from BNP Paribas observes that Japan's Industrial Production numbers showed a modest rebound in May, following the considerable decline seen after the sales tax hike in April.

Key quotes

"Industrial production rebounded in May by 0.5% from the previous month, after dropping by 2.8% in April."

"The rebound was more modest than anticipated by the financial markets (0.9%). Nevertheless, it is a further sign that the Japanese economy is recovering from the dip caused by the VAT hike."

"This has also been signaled by the Economy Watchers Survey. Many firms reported a plunge in orders in April followed by a slight recovery."

"Entrepreneurs remain optimistic about output prospects. According to METI’s survey on production forecast, manufacturing activity could decrease by 0.7% in June and rebound by 1.5% in July."

"The Economy Watchers also remain very optimistic about the outlook. The diffusion indices for future conditions in May were all above the 50 mark, indicating that the majority of entrepreneurs expect business conditions to improve in the coming months."

"The economy is expected to have contracted by 1.3% in Q2 from the previous quarter and to rebound by 0.3% in Q3."