Japan's factory output grew at the fastest rate in more than 9 years in June

Japan's factories ramped up output at the fastest pace in more than nine years in June, a welcome sign for policymakers hoping the economic outlook will improve.

Separate data showed retail sales rose for the fourth straight month in June, supporting the view that rising consumption helped the economy return to growth in the second quarter after contracting in January-March.

Factory output surged a seasonally-adjusted 8.9 percent in June from a month earlier, posting the biggest one-month rise since comparable data became available in February 2013, official data showed on Friday.

While the advance was bigger than a 3.7-percent gain expected by economists in a Reuters poll, a government official said downside risks for output remained as parts supply delays lingered.

The data comes after Toyota Motor said on it produced 793,378 vehicles globally in June, slightly above a target it had cut twice and capping a quarter that saw the company slip 9.8 percent behind its production plan.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to extend its recovery by 3.8 percent in July and 6.0 percent in August.

Separate data showed retail sales were weaker than expected, but still posted their fourth straight month of gains, rising 1.5 percent in June from a year earlier. That compared to a median forecast for a 2.8 percent gain in a Reuters poll.

Tokyo's core consumer prices, which exclude volatile fresh food but include energy costs, rose 2.3 percent in July from a year earlier, overshooting the Bank of Japan's inflation target for a second month.

The jobless rate, meanwhile, stood at 2.6 percent in June, unchanged from the previous month, while an index gauging job availability was 1.27 in June, slightly higher than 1.24 in May.

(With input from Reuters; Cover via CFP)

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