Japan boekt vooruitgang, maar doelen BoJ kwestieus

Japan's deflation likely abated further in April and factory output picked up, but economists say the Bank of Japan is unlikely to achieve its 2 percent inflation target in two years as demand won't catch up with oversupply quickly enough.

In a slew of data due out on Friday, April household spending will have cooled slightly after rapid gains in the first quarter, a Reuters poll shows, but spending is forecast to regain momentum as consumer sentiment improves.

Industrial production is expected to have risen 0.6 percent in April for a fifth straight month of gains, indicating Prime Minister Shinzo Abe's stimulus policies continue to bolster growth, although the shift from improved sentiment to more robust activity remains gradual.

"I think the two-year time frame will be difficult because the output gap is negative and there is a lot of price competition," said Norio Miyagawa, senior economist at Mizuho Securities Research & Consulting Co.