Japan's industrial output declined for a second consecutive month in May owing to a decrease in auto production, government data showed Friday. However, firms expect a robust rebound in output in the next couple of months.
The Ministry of Economy, Trade and Industry said that production fell 3.1 percent month-on-month in May. The outcome was worse than expectations for a 2.8 percent fall. Output was, however, 6.2 percent higher than the same month last year.
According to the Ministry, the commodities that mainly contributed to the decline were passenger cars and large trucks. Industries manufacturing transport equipment, chemicals and general machinery also contributed to the decline.
The Ministry's survey of manufacturing firms showed that the companies expect production to increase 2.7 percent in June and 2.4 percent in July. In the previous survey, manufacturers predicted 2.4 percent expansion for June.
The rebound in June will be supported mainly by electronic parts and devices, general machinery and electrical machinery, the report said.
Shipments in May decreased 1.5 percent from the previous month, marking a decrease for the first time in four months. It showed an increase of 11.6 percent from the previous year.
Inventories fell 0.6 percent in May from the previous month. This represented a decrease for the first time in three months. Inventories rose 4.8 percent from the previous year.
A separate report from the Ministry of Internal Affairs and Communications showed that Japan's core consumer price index, that excludes fresh food, fell 0.1 percent year-on-year in May, marking the first decline in four months.
The Bank of Japan has set an inflation goal of 1 percent. The Tokyo core consumer price index, released ahead of the nationwide data, fell 0.6 percent in June from a year earlier.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.