FILE PHOTO: A worker is seen at the factory of Nagumo Seisakusho Co., Ltd. in Jyoetsu, Niigata prefecture, Japan February 22, 2019. REUTERS/Tetsushi Kajimoto

TOKYO (Reuters) – Japan’s factory output likely rebounded in June from the prior month’s drop, while retail sales growth was expected to slow as new coronavirus infections dampened consumer confidence, a Reuters poll showed on Wednesday.

The mixed data forecast comes as Tokyo prepares to host the 2020 Olympic Games opening ceremony on Friday amid widespread doubt among the public about the ability of Olympic organisers to control COVID-19 infections.

Ministry of Economy, Trade and Industry (METI) data out at 8:50 a.m. July 30 (2350 GMT July 29) is expected to show industrial production grew 5.0% month-on-month in June, bouncing from a sharp 6.5% drop in May, according to a Reuters poll of 15 economists.

Robust overseas demand has underpinned exports and factory output, which have been a bright spot for the world’s third-largest economy over the past months, despite May’s slump which was due to a sharp fall in car production.

“As production adjustments at some factories of carmakers are expected to continue from July onward due to the prolonged impact of the chip shortage, there remains a downside risk to car output,” said Junpei Fujita, an economists at Mitsubishi UFJ Research and Consulting.

Japan’s economy likely avoided falling into recession in the second quarter but a fresh state of emergency in Tokyo to halt a rise in coronavirus infections is hurting the growth outlook, a separate Reuters poll showed this month.

Separate trade ministry data due at 8:50 a.m. July 30 (2350 GMT July 29) is expected to show retail sales edged up 0.2% year-on-year in June, slowing substantially from the previous month’s sharp 8.3% gain.

Job availability and the jobless rate were projected to come in little changed in June, at 1.10 and 3.0% respectively, while housing starts were expected to see a 7.2% jump in June, slowing from a 9.9% rise in the prior month, the poll showed.

Job data will be released by the labour ministry at 8:30 a.m. July 30 (2330 GMT July 29) and housing starts data will be issued at 2 p.m. July 30 (0500 GMT).

Reporting by Daniel Leussink; Editing by Kim Coghill

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