Japan outlook bleak on industrial output blow
Tokyo, October 1, 2011
Japan's industrial output rose less than expected and household spending plunged in August, data showed, amid concerns slowing demand could hamper the nation's fragile post-quake recovery.
Worries for the health of the world's third-largest economy have increased as exporters face a soaring yen that eats into repatriated profits and as demand softens both at home and abroad amid fears of a global recession.
Finance Minister Jun Azumi on Friday said that Japan will secure an additional 15 trillion yen ($195.79 billion) in funds it can use to intervene in currency markets as it looks to reinforce its ability to tame the currency.
Azumi added the finance ministry will require currency traders to report their trading positions daily for another three months in a bid to deter speculative moves.
Japan's factory production rose by 0.8 per cent in August on-month. But the data missed expectations of a 1.5 per cent gain.
Meanwhile, consumer spending continued to slide. Yesterday's data showed household spending fell 4.1 per cent in August on-year, missing forecasts of a 2.9 per cent fall.
Producers expected output to fall 2.5 per cent in September before rebounding 3.8 per cent in October, amid concerns over the euro zone debt crisis and a US slowdown.
Japan's retail sales fell for the first time in three months during August, partly due to the effect from lower TV sales. Base salaries declined by an average 1.7 per cent.
Separate government data yesterday showed Japan's core consumer prices rose 0.2 per cent in August from a year earlier, beating market expectations of a 0.1 per cent increase.
The core consumer price index, which excludes volatile food prices, has risen in part due to an increase in energy costs, but Japan in general remains mired in a deflationary trend of falling prices.
Separately, Japan's jobless rate stood at 4.3 per cent in August, down 0.4 percentage points from the previous month. The reading excludes figures from the disaster-hit northeast of the country.
The market had expected the rate to be flat at 4.7 per cent.
