Japan remains mired in deflation.

 Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%, indicating how far the Bank of Japan has to go in achieving inflation of 2%. More positively, Japanese industrial output rose 1.7% on month vs +0.9% in March and consensus of +0.6%. While the increase indicates that companies have boosted output in response to a pick-up in exports, manufacturers expect production to be flat this month and to fall 1.4% in June.