All industry activity figures for April suggest Japan started Q2 on the front foot

Japan's Ministry of Economy, Trade and Industry data showed Tuesday that Japan's all industry activity expanded at a faster pace in April. Data underscored that the economy started the second quarter on the front foot.

The indices of all industry activity advanced 1.3 percent on a monthly basis in April, faster than the 0.2 percent increase seen in March and a 1.2 percent rise forecast by economists. Today’s figures also revealed that the construction sector also had a strong month, with output up 2.4 percent M/M, the most since January. Tuesday’s data follows tertiary activity which rose 1.4 percent M/M and industrial production which rose 0.5 percent M/M.

Despite the solid figures for April, surveys suggest that activity will soften over the remainder of the second quarter. The headline economy watchers index fell for the fourth month out of the past five in May to its lowest level since 2014. The manufacturing PMI remained weak in the latest month, flat at its lowest level since 2012, while the services PMI and headline consumer confidence indices have also deteriorated since the first quarter.

Tankan survey results suggested that manufacturing sentiment merely edged up slightly this month from May’s three-year low while the equivalent measure for the non-manufacturing sector slipped back to its lowest since April 2013. The forward-looking survey components flagged the likelihood of a very modest improvement in the coming quarter.