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Japan factory output seen down for second month in sign of patchy recovery- Reuters poll

Published 11/24/2022, 11:49 PM
Updated 11/24/2022, 11:50 PM
© Reuters. FILE PHOTO: A bicycle rider rides past a factory at Keihin industrial zone in Kawasaki, south of Tokyo, Japan, August 18, 2016. Picture taken on August 18, 2016.  REUTERS/Kim Kyung-Hoon

By Tetsushi Kajimoto

TOKYO (Reuters) - Japan's factory output likely fell for a second straight month in October, while retail sales probably grew at the fastest pace since May 2021, according to a Reuters poll of 17 economists, underscoring an uneven recovery from the COVID-19 pandemic.

The mixed batch of indicators underscores the challenge for the world's third largest-economy to get on a sustainable growth path as Prime Minister Fumio Kishida, whose public support is falling, rolls out more stimulus to curb cost-push inflation.

Adding to the pain of higher costs of living and doing business due to the excessively weak yen, the spectre of a global recession looms large, undermining business sentiment, analysts say.

Data from the industry ministry, due out at 2350 GMT Nov. 29, is expected to show industrial output fell 1.5% in October from the previous month, following the prior month's 1.7% decline, Reuters poll showed.

That marked a second straight month of declines.

"While auto output is recovering from supply disruptions such as chip shortages, concerns about the faltering global economy are rising, weighing on demand for electronics parts and devices which are sensitive to the economic outlook," said Takeshi Minami, chief economist at Norinchukin Research Institute.

In a glimmer of hope for recovery in private consumption, which makes up more than half of the economy, separate data due on 2350 GMT Nov. 28 is expected to show retail sales grew 5.0% in October from a year earlier, the fastest annual gain since May 2021.

The subsiding of a seventh wave of COVID infections unleashed pent-up demand for various items including cars whose production rebounded from the previous year, analysts say.

Other data out at 2330 GMT Nov. 28 will likely show the job market remained tight in a sign that a shortage of workers could intensify at labour intensive industries such as service-sector firms, possibly putting upward pressure on wages.

The job data will probably show the jobless rate slipped to 2.5% in October from the previous month's 2.6%.

© Reuters. FILE PHOTO: A bicycle rider rides past a factory at Keihin industrial zone in Kawasaki, south of Tokyo, Japan, August 18, 2016. Picture taken on August 18, 2016.  REUTERS/Kim Kyung-Hoon

The job availability likely stood at 1.35 in October, up slightly from 1.34 seen in the previous month, meaning that more than 10 jobs were available per 13 job-seekers.

Land ministry data due out at 0500 GMT Nov. 30 likely showed housing starts fell 1.3% year-on-year in October, swinging from a 1% gain seen in the previous month.

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