Japan's Annual Industrial Output Declined 6th Consecutive Month, Nikkei 225 Extended Monthly Gains

Akira Ito
31 May, 2024
Tokyo

In a broad rally, market indexes in Tokyo rebounded more than 1% after the global bond selloff paused following the downward U.S. economic growth revision. 

The Nikkei 225 and the Topix indexes jumped more than 1% in the hopes that policymakers may lower rates at least once in the second half after U.S. economic growth in the first quarter was lowered to 1.3% from the initial estimate of 1.6%. 

The Japanese yen weakened and traded at 157.11 against the U.S. dollar, and the yield on a 10-year Japanese government bond stayed above 1.07%, a 12-year high. 

Closer to home, the Tokyo area consumer price index increased by 2.2% in May from 1.8% in April, the Statistics Bureau of Japan reported Friday. 

Core inflation, which excludes food and energy prices, rose to 1.9% from a two-year low of 1.6%. 

Despite the rise in inflation, overall and core inflation rose to a slower than 2% target set by the Bank of Japan, and the price movement in the Tokyo area is generally seen as a leading indicator of nationwide price trends. 

In addition, investors reviewed the latest economic updates on industrial output, retail sales, and the jobless rate. 

 

Japan's Industrial Output Declined In April

Japan's industrial output declined by 1.0% at an at an annual pace in April, the Ministry of Economy, Trade, and Industry reported Friday. 

The annual industrial output declined for the sixth month in a row but eased at the softest pace. 

On a monthly basis, output decreased 0.1% in April, reversing the 4.4% increase in the previous month, and declined for the fourth time in the last six months. 

 

Japan's jobless Rate Held Steady In April 

Japan's jobless rate held at 2.6% for the third month in a row in April, the ministry said in a separate report released Friday. 

The number of unemployed held steady at 1.83 million, while the number of employed decreased from 90,000 to 67.51 million.

The non-seasonally adjusted labor force participation rate increased to a five-month high of 63.1% in April from 62.9% in the month a year ago. 

At the same time, the jobs-to-applications ratio eased to 1.26 from 1.28 in the previous month. 

 

Japan's Retail Sales Expanded In April 

Retail sales rose 2.4% in April from a year ago and rebounded from the downwardly revised 1.1% rise in March, which was the slowest pace of increase in two years, the Ministry of Economy, Trade, and Industry reported in a separate report. 

On a monthly basis, sales rose 1.2% in April after falling by the same amount in March. 

Machinery and equipment sales gained the most with an increase of 9.2%, followed by non-store retail trade by 6.3%, pharmaceuticals and cosmetics by 6.0%, and fuel by 4.8%. 

Automobile sales declined 7.9%, and textile, apparel, and personal goods sales fell 1%. 

 

Japan Stock Movers 

The Nikkei 225 stock average increased 1.1% to 38,487.90, and the Topix index advanced 1.7% to 2,772.49. 

Tokyo Electron, Advantest, Screen Holdings, Lasertec, and Socionext advanced between 1% and 3%. 

Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui gained between 1% and 2%. 

Toyota Motor jumped 2.2% to ¥3,401.0 after the vehicle maker said the weakness in Japan and China dragged April production down by 0.5% from a year ago. 

Daiwa Securities, Yamato Holdings, and Sumitomo Pharma advanced more than 4%.