Belfast Telegraph

Monday 22 December 2014

Fall in Japan's industrial output

Demand for big-ticket items such as cars has fallen
Demand for big-ticket items such as cars has fallen

Japan's industrial output contracted by 4.1 % in September from August and 8.1 % from a year earlier as car makers and steel mills cut production due to shrinking demand and antagonisms with China.

The data released on Tuesday by the Ministry of Economy, Trade and Industrial (METI) adds to pressures on the central bank to stimulate the economy.

The economic recovery that followed Japan's March 2011 disasters has been doused by slowing global growth.

Flaring tensions with China over disputed islands in the East China Sea have further crimped demand, especially for big-ticket items such as cars.

Slowing growth in China, meanwhile, has hit demand for industrial inputs such as steel and machinery.

"Industrial production is on a downward trend," the ministry said, forecasting a further decline in October, followed by a rebound in November.

Exports, usually a bright spot for Japan's economy, have also been sapped by the prolonged crisis in Europe and the persistent strength of the yen, which makes products made in Japan relatively more expensive in overseas markets.

Shipments of passenger cars dropped 12.6% in September from August and 13.2% from a year earlier, METI reported. Shipments of virtually all other products also fell.

Jobless rate figures for September also offered little encouragement as the government reported the seasonally adjusted unemployment rate was 4.2 % in September, unchanged from August. The ratio of job offers to seekers fell to 0.81 from 0.83 in August, meaning there were 81 jobs for every 100 job seekers.

The central bank is due to meet, with many expecting it to expand its assets-purchasing programme, aimed at catalysing demand to counter slowing growth.

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