Japanese industrial output likely dropped 0.6% in November

Japanese factory output likely dropped by around 0.6 percent in November compared to the previous month, according to a recent Reuters poll.

The poll of 20 analysts found that Japan’s industrial output last month ‘probably fell’ 0.6 percent after a 1.4 percent rise in October and a 1.1 percent increase in September.

Tatsushi Shikano, deputy chief economist at Mitsubishi UFJ Morgan Stanley, was quoted by Reuters as saying: “Inventory adjustments have been progressing and there is some recovery in exports, while domestic demand remains weak,”

He added: “It’s still too early to say there’s a steady recovery in factory output but I think it has already hit bottom.”

Japan is set to announce official factory output figures and retail sales data on Monday at 08:50 GMT+9.

Takeshi Minami, chief economist at Norinchukin Research Institute, told Reuters:

“Other consumer sales-related data such as department store sales have shown weak figures, partly due to weather-related factors,”

“But I think the basic trend of consumer spending is toward a recovery, since wage conditions aren’t too bad, although it is not strong.”

Bank of Japan (BOJ) Gov. Haruhiko Kuroda and Prime Minister Shinzo Abe have ramped up pressure on companies to pay employees higher wages and use record profits to invest more in growth.

Earlier this month the BOJ took steps to fine-tune its stimulus program. The BOJ says that inflation is on track to reach its 2% target, stressing that record-low energy prices is the main reason why there hasn’t been a significant increase in prices.

Mr. Kuroda said that the central bank had “unwavering determination to do whatever it takes to overcome deflation and achieve the price stability target of 2%.”