Japan’s Aug factory output extends declines on car production cuts

Economy19 minutes ago (Sep 29, 2021 08:38PM ET)

(C) Reuters. FILE PHOTO: Smoke rises from a factory during the sunset at Keihin industrial zone in Kawasaki, Japan, January 16, 2017. REUTERS/Toru Hanai/File Photo

By Kantaro Komiya and Yoshifumi Takemoto

TOKYO (Reuters) – Japan’s industrial output fell for the second straight month in August as COVID-19 outbreaks elsewhere in Asia disrupted supply chains for carmakers already facing headwinds from a prolonged chip shortage.

Separate data out on Thursday showed retail sales in August slipped for the first time in six months as households cut spending amid a coronavirus relapse, signalling lacklustre consumer sentiment.

The data suggests the pandemic continued to gnaw at Japan’s economy this quarter, posing an immediate challenge to the next prime minister, Fumio Kishida, who won the ruling party leadership vote on Wednesday.

Factory output lost 3.2% in August from the previous month, official data showed on Thursday, hit by weaker production of cars and electronic machines and marking the second consecutive month of contraction after a 1.5% drop in July.

The decline was larger than the 0.5% fall forecast in a Reuters poll of economists.

Major Japanese automakers including Toyota Motor (NYSE:TM) Corp, Nissan (OTC:NSANY) Motor Co and Honda Motor Co have faced production cuts since late August due to components shortage, which could have a lasting impact well into October, the industry lobby warned earlier this month.

Manufacturers surveyed by the government expect output to rise 0.2% in September and 6.8% in October.

The government downgraded its assessment of industrial production for the first time since April 2020, saying it was “stalling”.

Analysts expect the world’s third-largest economy to grow at an annualised pace of 1.2% this quarter, much weaker growth than other advanced economies, as stop-go coronavirus curbs reined in private consumption.

Separate government data on Thursday showed retail sales were weaker than expected, falling 3.2% in August from a year earlier.

That marked first decline in six months and was larger than the median market forecast for a 1.0% fall.

The worse-than-expected retail sales came after Japan said earlier this week it would lift coronavirus curbs in all regions by Thursday given a stark fall in COVID-19 cases and as around 60% of the population have been fully vaccinated.

Compared with the previous month, retail sales declined a seasonally adjusted 4.1%.

Japan’s Aug factory output extends declines on car production cuts

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Investors pour money into British start-ups

British start-ups have raised more than $30 billion so far this...

Subscribe to our stories

Join the exclusive subscription today and get premium articles for free

Same Category

Investors pour money into British start-ups

British start-ups have raised more than $30 billion so...

Tesla’s Musk dials into Volkswagen executive conference

Stock Markets22 minutes ago (Oct 17, 2021 11:31PM ET) 2/2 (C)...

Hong Kong Exchange Fund posts Q3 investment loss of $1.70 billion -HKMA

Forex28 minutes ago (Oct 17, 2021 11:25PM ET) (C) Reuters....