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Japan Industrial production December 2020

Japan: Industrial output in December drops at sharpest pace since May

Industrial production dropped 1.6% in December, following November’s 0.5% month-on-month decline. December’s result marked the worst reading since May.

On an annual basis, industrial output declined 3.2% in December, a softer drop than November’s 3.9% fall. Meanwhile, annual average variation of industrial production was unchanged coming in at November’s minus 10.1% in December.

Regarding the outlook, analysts at Nomura commented:

“We still forecast that industrial output will contract q-q in Jan-Mar 2021, mainly because of the flare-up in the spread of COVID-19 since last autumn. […] We expect actual output in January to come in below what is forecast in METI’s survey, and we think that automobile production in particular may be revised down substantially in January and February because of the semiconductor shortage. That said, we also note that the probability of industrial output avoiding a q-q decline in January–March looks higher than it did before.”

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