Photographer: Kiyoshi Ota/Bloomberg

Japan’s Industrial Production Rises Slightly in October

Japan’s industrial production rose for a third consecutive month in October, with a slight gain just beating the median forecast of economists, as the nation’s exports compensate for weak domestic spending.

Key Points

  • Industrial output rose 0.1 percent in October from a month earlier (forecast 0 percent).
  • Output is forecast to rise 4.5 percent in November, then fall 0.6 percent in December.

Big Picture

Today’s data reflect solid trade. Exports, measured month on month, gained for a third month in October, while household spending and retail sales both declined when compared to the previous year. The yen has weakened since President-elect Donald Trump’s surprise win earlier this month, supporting the outlook for shipments.

Economist Takeaways

  • "The results weren’t bad as shipments had a good gain and inventories fell, with a slight gain in production," said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute in Tokyo.
  • A pick-up in global demand for IT items such as smartphones, and recoveries in economies in the U.S. and Asia, are helping Japanese exports and production, Shinke said.
  • "Japan’s economy will likely head for a recovery in 2017, helped by a pick-up in exports and the effects of the economic stimulus measures," he said.

The Details

  • Industrial output fell 1.3 percent from a year earlier (forecast -1.3 percent)
  • Measured month on month, shipments rose 2.2 percent in October, the most in a year, while inventories fell 2.1 percent.
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