Industrial production recorded an unexpected rebound of 1.7% MoM seasonally adjusted in June, beating the market consensus of -0.8%. This increase more than offset the previous month’s decline of -0.1%. Output in semiconductor-related sectors posted solid growth, driven by robust investment in AI, while transportation excluding automobiles also showed notable gains.
Additionally, retail sales rose 1.0% in June (compared to -0.6% in May and a market consensus of 0.5%), with the increase being broad-based except for a decrease in fuel sales. Apparel sales grew for the fifth consecutive month, and general merchandise registered its second monthly gain.
With this strong recovery in economic activity in June, we have revised up the 2Q25 GDP forecast to 0.1% QoQ sa from 0.0%. While the pace of recovery remains moderate, the negative effects of tariffs may prove less severe than previously anticipated.
AloJapan.com