Japan's factory output rose in July at the fastest pace on record, driven by automobiles and car parts, signalling a gradual recovery from the blow delivered by the coronavirus pandemic.
But retail sales fell for a fifth straight month and at a somewhat faster pace, a worrying sign for private consumption, which accounts for more than half of the world's third-largest economy.
Monday's data underscored the fragility of an economy that suffered a record 27.8% contraction in the April-June quarter as the pandemic took a heavy toll on both domestic and external demand.
While analysts believe the economy has bottomed out after lockdowns were lifted in late May, they say any rebound will be modest amid worries about a second wave of infections.
Highlighting weak consumer demand, retail sales fell 2.8% year-on-year in July, worse than a 1.7% drop seen by economists in a Reuters poll and following a 1.3% drop in June, separate METI data showed on Monday.
Declines in car demand dragged down overall retail sales, and department stores and supermarkets suffered from sluggish consumer activity amid a surge in new COVID-19 cases.
Clothing demand also suffered, while oil product sales fell reflecting declines in crude oil prices, the data showed.
On a seasonally-adjusted basis, retail sales fell 3.3% month-on-month in July, posting the first drop in three months.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.