A slew of economic data from Japan are due for release this week which are likely to provide cues on the strength of the broader economy. A batch of soft indicators would reinforce views that the world’s third largest economy likely slowed sharply in April-June from the prior quarter, with some expecting a contraction. Japan’s industrial output, due on July 29 at 2350 GMT, probably grew at a tepid rate of just 0.3 percent month-on-month in June after a 2.1 percent drop in May. Household spending, due on July 30 at 2330 GMT, probably grew 1.7 percent year-on-year in June, slowing from the prior month’s 4.8 percent gain.The jobs data and the core consumer price index will be released at the same time as the household spending data. Japan’s jobless rate is expected to remain at 3.3 percent in June, the lowest since April 1997. Underlining a labour shortage in a fast-ageing society, the jobs-to-applicants ratio in June likely rose from 1.19 to 1.20 in June, which would be the highest since February 1992. “Much will depend on how the economy fares in July-September, but there’s a plenty of chances that the BOJ could ease policy further in October. The focus next week is factory output data, which gives clues on the strength of manufacturing activity and the broader economy. said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. Annual core consumer inflation was seen grinding to a halt in June after a 0.1 percent rise in May, reflecting cheaper oil prices, and keeping the Bank of Japan under pressure as to meet it 2 percent inflation target. The government will also issue manufacturers’ forecasts for factory output for July and August along with the June data.“If the economy remains sluggish, the BOJ would be forced to drastically cut its economic view, judging that the price trend is wavering,” Shinke added The dollar rose from a two-week low against the yen on Tuesday, as investors shifted focus to the possibility of a 2015 U.S. interest rate rike after China’s stock market rout. The dollar gained a third of a percent to 123.66 yen, up from its low of 123.01 yen on Monday.
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