According to data released by the Ministry of Economy, Trade and Industry, industrial production rose by 15.8% in April (year-on-year), higher than expectations of 15.4%, which was also last month’s figure. In monthly terms, industrial production rose by 2.9%, higher than expectations of 2.5%, which was the previous month’s figure.
Japanese production capacity went up by 1.1% in April, lower than the previous month's 5.6% expansion.
According to the data, industrial production was mostly driven higher by machinery (both business-oriented and general-purpose), as well as communications equipment.
Just like the rest of the world, the pandemic has had negative consequences on Japan’s economic performance. The Japanese GDP shrank by 3.9% (month-on-month), though less than expectations of 4.8%. In yearly terms, the GDP fell by 5.1%.
Both capital spending and private consumption fell during the first quarter, which is a sign of weakening domestic demand.
In order to counter the effects of the pandemic on the economy, the Japanese government has implemented a fiscal stimulus plan, while the Bank of Japan has chosen to keep a loose monetary policy stance. It is highly likely that the Bank of Japan will eventually announce that it will extend its pandemic relief program by six months, though this may not happen in the next meeting.
Japan is currently trying to keep the spread of the virus under control. Since the beginning of the pandemic, 775,231 cases have been reported in the country, including 14,071 deaths. The recent figures show that the government has been relatively successful at containing the spread, though some are accusing it of manipulating the data to justify the decision not to cancel the Tokyo Olympic games, which are set to happen soon.
Despite the Japanese government's decision not to cancel the games being controversial, the United States government praised the move, though highlighting the need for health measures that would ensure the safety of those involved.
Japan's vaccination campaign has been picking up and will probably continue doing so given the proximity of the Olympic games. Around 23.7 million doses have already been distributed among the population, while 6.1 million individuals – about 4.8% of the population – are now fully vaccinated.