Japan September output likely fell as supply disruptions hit automakers

23-Oct-2021 Intellasia | Reuters | 5:02 AM Print This Post

Japan’s factory output likely fell in September as supply chain disruptions continued to hit automakers, a Reuters poll showed, reinforcing expectations that growth in the world’s third-largest economy cooled sharply in the third quarter.

Rising commodity prices and China’s faltering recovery have recently added to headaches for Japanese manufacturers, clouding the outlook for the export-reliant economy, analysts say.

“Blackouts and soaring production costs in China pose additional headwinds to the recovery from the pandemic, besides parts supply issues in the coronavirus-hit Southeast Asia and the lasting global semiconductor shortage,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Industrial output likely fell 3.2 percent in September month-on-month after dropping 3.6 percent in August, according to a Reuters poll of 14 economists.

Separate data is also likely to show retail sales shrank 2.3 percent in September from a year earlier following a 3.2 percent fall in August, the poll showed.

“Consumer sentiment picked up to some extent as (COVID-19) infection peaked out, but supply limit-induced weakness in car sales worked as a downward pressure,” Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

The batch of weak data would underscore the challenges new prime minister Fumio Kishida’s ruling party face ahead of a general election on October 31.

The government will release the retail sales data on October 28 at 8:50 a.m. (2350GMT, October 27) and industry output figures on October 29 at 8:50 a.m. (2350GMT, October 28.)

Japan’s job data is likely to show the unemployment rate standing at 2.8 percent in September and the job-to-applicants ratio at 1.14, the poll showed, roughly unchanged from August.

The consumer price index (CPI) in Tokyo a leading indicator for nationwide price inflation likely rose 0.3 percent in October from a year earlier, picking up from a 0.1 percent gain in the prior month.

The jobs and Tokyo CPI data will be released on October 29 at 8:30 a.m. (2330GMT, October 28).

Japan’s economy emerged from last year’s pandemic-induced doldrums as robust exports offset some of the weakness in consumption. However, analysts now expect the economy grew just 0.8 percent in July-September on an annualised basis, cooling from 1.9 percent in April-June, due partly to softening factory output.



Category: Japan

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