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Japan Industry October 2019

Japan: Industrial production contracts sharply in October

Industrial production declined 4.2% on a month-on-month and seasonally-adjusted basis in October, contrasting September 1.7% increase. The print was the steepest decline since February 2018 and undershot the 2.1% drop that market analysts had expected.

The categories that drove the month-on-month contraction were motor vehicles, general-purpose and business-oriented machinery and production machinery, in that order. Lower output for these categories was partially offset by increases in production of electronic parts and devices, petroleum and coal products and ceramics, stone and clay products.

On an annual basis, industrial output declined 7.4% in October, contrasting September’s 1.3% expansion. The annual average variation in industrial production fell from minus 0.9% in September to minus 1.9% in October.

The Survey of Production Forecast showed that manufacturers are becoming more pessimistic. Manufacturers now expect industrial output to have recorded a 1.5% monthly decrease in November, sharper than the 1.2% drop forecast in the previous month’s survey. They, however, project a 1.1% expansion in December.

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