Japanese factories put in an unexpectedly weak performance in June while household spending also slipped, underscoring the challenge Tokyo faces in kickstarting the world's third-largest economy.
The figures offer a mixed picture for Prime Minister Shinzo Abe's bid to stoke the deflation-plagued Japanese economy, after he unleashed a growth-boosting program dubbed "Abenomics" involving massive government spending and central bank monetary easing.
The key aim is to reverse years of falling prices which have held back growth, as the Bank of Japan (BoJ) aims to hit a two-per cent inflation target in as many years, an ambitious timeline that some analysts have cast doubt on.
On Monday, BoJ governor Haruhiko Kuroda said a planned sales tax hike would not derail Japan's recovery, as Abe mulls whether to usher in the increase that is seen as crucial to shrinking the country's massive debt.
The fresh data on Tuesday shows that Japan's industrial production turned down 3.3 per cent on-month in June as production of cars and electronic parts slipped, highlighting a mixed picture for demand overseas. The decline reversed a rise in May and was worse than the average economist expectations for a 1.7 per cent decline, according to the leading Nikkei business daily.
Separate figures showed that household spending last month slipped 0.4 per cent from a year earlier, despite expectations of a rise after earlier figures showed consumer prices went up for the first time in more than a year.
However, factory data was brighter on a quarterly basis with output expanding 1.4 per cent between April and June, while a producer survey released with the figures was also optimistic.
Firms expect factory output to rise 6.5 per cent in July and then slip 0.9 per cent in August, it said.
"Industrial production shows signs of picking up at a moderate pace," the ministry of economy, trade and industry said in a statement.
Also upbeat was fresh jobs data that showed Japan's unemployment rate fell to 3.9 per cent in June, the lowest point in more than four years.
The decline - from 4.1 per cent in May - translated into the best reading since 3.8 per cent posted in October 2008, according to the internal affairs ministry.
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