Japan Factory Output Falls 4.1% in September

Oct. 29, 2012
A slump in cars, auto parts and machinery helped dent output amid a slowing in demand for Japanese exports.

Japan's factory output fell by a bigger-than-expected 4.1% in September, the industry ministry said Tuesday, data likely to fuel worries about the world's third-biggest economy.

The decline was worse than an average market forecast of a 3.1% drop from the previous month, as a slump in cars, auto parts and machinery helped dent output amid a slowing in demand for Japanese exports and a diplomatic tussle with China that has hit the Asian giants' trade ties.

"Industrial production is on a downward trend," the ministry said.

The brief comment appeared stronger than last month when the ministry said that factory output "appeared to be weakening".

A manufacturers' survey released with the output data expected a 1.5% decline in October's factory output before rising 1.6% in November.

Separate figures released Tuesday showed that, while quake reconstruction spending after last year's disaster helped keep Japan's jobless rate steady at 4.2% in September, household spending slipped 0.9% on year.

The data come as the Bank of Japan (BoJ), under siege from politicians clamoring for urgent action on the slowing economy, holds a policy meeting later in the day that was expected to generate further easing measures.

With ultra-low interest rates already in the place, the central bank may tinker with its main policy tool -- an 80 trillion yen (US$1.0 trillion) asset-purchase program.

But earlier expansions of the program appear to have done little to kickstart Japan's economy, which was hammered by last year's quake-tsunami disaster.

The country recently posted its worst September trade figures in more than 30 years, as a territorial dispute with Beijing over an island chain in the East China Sea hurt exports, particularly of Japan-brand vehicles.

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