Japan's IP to post modest growth in June

Japan's industrial production recorded -2.1 mom and -3.9 yoy growth in May. The economy is likely to post better performance in June. Societe Generale estimates, Japan's industrial production is likely to show modest growth of 0.1% mom in June, after firm growth in April (+1.2% mom) and a sharp drop in May (-2.1% mom). 

Production in May was weak owing to a calendar effect (this year's Golden Week holidays were longer than usual), and many companies were closed for a longer period, resulting in temporary weakness in production. In June, real exports bounced back to +0.9% mom but the rebound was smaller than expected owing to a sharp -5.0% mom fall in May, says SocGen. Overseas demand remains unstable, and many companies are unwilling to invest in inventories (components and finished products alike).