Data on core machinery orders, trade, and consumer price index inflation will dominate Japan’s week. Based on the trade data from early June, we expect exports to rebound in June. We anticipate a divergence in export performance by region. Exports to Asia, excluding China and the EU, are expected to be stronger than exports to China and the US, given the negative impact of tariffs.
Core machinery orders are also expected to increase, albeit slightly. Tech investment remains solid, which may boost order data in May. Lastly, Japanese CPI, out Friday, should show a slight easing of pressures due to the government’s policy of capping energy and food prices. Nevertheless, inflation is likely to remain well above 3%.