Japanese industrial production (IP) rose 2.5% month over month for the first month in four in February, boosted by a rebound in output of semiconductor equipment and integrated circuits, said Daiwa Capital Markets.

While car production rose to a 14-month high, the imposition of a 25% tariff hike on auto exports to the United States will likely weigh on output over the near terms, noted the bank.

Following the weakness at the turn of the year, manufacturing output was still trending a touch below the Q4 average despite the pickup in February, stated Daiwa.

Meanwhile, Japanese retail sales rose 0.5% month over month for the third month out of the past four to suggest a positive contribution to gross domestic product growth so far in Q1, pointed out Daiwa.

The Bank of Japan's Tankan survey is likely to report mixed results in Q1 as U.S. tariff speculation likely weighed on manufacturing sentiment, but record tourist arrivals buoyed certain services sectors, added Daiwa. The price gauges will also be closely watched ahead of the BoJ's May 1 policy meeting, with firms possibly boosting output price expectations to reflect the recent rise in food prices and labor costs.

The Tankan survey is slated to be released at 7:50 p.m. ET Monday.