Japan’s industrial production took a sharp hit in August, contracting by -3.3% mom, a significant miss compared to market expectations of -0.5% mom decline.
The seasonally adjusted production index for factories and mines stood at 99.7, based on the 2020 benchmark of 100. Among the 15 industrial sectors surveyed, 12 experienced a decrease in output, with motor vehicles leading the decline at -10.6% MoM. This drop was largely attributed to operational disruptions at more than a dozen Toyota Motor Corp. plants, caused by Typhoon Shanshan.
Despite this steep decline, Japan’s Ministry of Economy, Trade, and Industry maintained its assessment that industrial production remains “indecisive.” Manufacturers polled by the ministry are forecasting a rebound, with output expected to grow by 2.0% mom in September and further rise by 6.1% mom in October.
On a brighter note, Japanese retail sales increased by 2.8% year-on-year yoy in August, surpassing median forecast of 2.6% yoy . Compared to the previous month, retail sales posted 0.8% mom increase, following 0.2% mom rise in July, indicating steady consumer demand.
