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Japan's September Factory Output Growth Falters; Retail Sales Rise but Uncertainty Looms over the Economy

Industrial output growth underperforms with 0.2% gain as compared to expected 2.5%, amid declining investment due to rising interest rates, while sluggish production noted in machinery output. Retail sales continue to grow, marking a 19th month of gains.

Overview

  • Japan's factory output in September rose by only 0.2%, significantly less than the expected 2.5%, according to data from the Ministry of Economy, Trade and Industry (METI).
  • The production of machinery output fell 3.4% in the same month, mainly due to a decline in the manufacturing of industrial robots and metals, both domestically and overseas.
  • Rising interest rates are reportedly causing a decline in investment appetite in the country and abroad.
  • Although the output for chips and electronic devices is unlikely to recover soon, production in the automobile industry increased by 6.0% after past disruptions were resolved.
  • Separate data indicated that Japan's retail sales saw a 5.8% rise in September, marking the 19th consecutive month of gains, despite a slight 0.1% dip from the previous month.