By Kaori Kaneko
TOKYO (Reuters) – Japan’s consumer inflation remained subdued in April on lower energy costs, adding pressure on the Bank of Japan after already two years of massive stimulus aimed at banishing deflation.
Other key data next week such as industrial production, exports and consumer spending related data will likely show some positive numbers but analysts said they were not changing their views on the modest pace of the economic recovery.
“The actual condition of the economy lacks momentum,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
“It needs wage increase spreading among small and medium-sized firms not only among big firms in order to realize the full-fledged recovery.”
The core consumer price index (CPI), which includes oil products but excludes fresh food prices, probably edged up an annual 0.2 percent in April, a Reuters poll of 21 analysts showed.
In March, the core CPI also rose 0.2 percent excluding the effect of last year’s sales tax hike.
The poll also showed industrial production rose 0.8 percent in April from the previous month, up for the first time in three months.
“The pace of recovery for both external and domestic economies remain only gradual and there is downward pressure from an inventory adjustment, so an expected gain in factory output will be only moderate,” said Takeshi Minami, chief economist Norinchukin Research Institute.
April exports, due on Monday, probably rose 6.4 percent from a year earlier, up for the eighth straight month and imports were forecast to have fallen an annual 1.5 percent, down for the fourth straight month, the poll showed.
That would result in a trade deficit of 318.9 billion yen ($2.64 billion) after the nation posted its first trade surplus in nearly three years in March.
The poll found household spending increased an annual 3.1 percent in April, the first gain since March last year. Retail sales probably rose 5.4 percent from a year earlier, up for the first time in four months.
The unemployment rate was steady at 3.4 percent last month and the job availability ratio was also unchanged at 1.15, the poll showed.
The internal affairs ministry will release CPI data, labor market data and household spending at 8:30 a.m. on May 29 (2330 GMT May 28).
The trade ministry will announce production data at 8:50 a.m. on the same day and retail sales on May 28.
The Bank of Japan on Friday maintained its massive stimulus program and offered a slightly more update view of the world’s third-largest economy.
Its outlook followed data showing the economy expanded at its fastest pace in a year in the first quarter.
(Editing by Jacqueline Wong)