Deutsche Bank Research points to a busy week for Japan, with strong May retail sales already released and industrial production data due. The Bank of Japan’s (BoJ) Tankan survey on Wednesday is expected to show broadly steady sentiment, which the bank says could support the case for further gradual policy tightening, with implications for Japanese Yen and local markets.

Retail strength and Tankan outlook

"In Japan, today’s retail sales (out earlier) is followed by industrial production tomorrow, where our economists expect a +1.4% month-on-month increase."

"The highlight, however, will be the Bank of Japan’s Tankan survey on Wednesday, which is expected to show broadly steady sentiment and may reinforce the case for further gradual policy tightening."

"In Japan, early data showed retail sales rose 5.3% YoY in May, well above expectations of 3.0% and up from April’s downwardly revised 2.8%."

"Asian equity markets are mixed this morning. Easing geopolitical tensions in the Middle East are providing some support, though fresh regional trade frictions are weighing on sentiment after China imposed tighter export controls on 20 Japanese entities, requiring government approval for shipments."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)