By Kantaro Komiya
TOKYO (Reuters) – Japan’s factory output shrank at the fastest pace in eight months in January as shrinking overseas demand amid a global economic slowdown took a heavy toll on business activity.
Factory output fell 4.6% in January from a month earlier on a seasonally adjusted basis, government data showed on Tuesday. The contraction was much larger than economists’ median forecast of a 2.6% decline and followed an upwardly-revised 0.3% increase in December.
Output of auto products slumped 10.1%, dragging down the overall index. Outputs of items such as production machinery and electronic parts dropped 13.5% and 4.2%, respectively.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expect output to rise 8.0% in February and gain 0.7% in March, the data also showed, although the official poll tends to report an optimistic outlook.
Separate data showed Japanese retail sales rose 6.3% in January from a year earlier, beating a median market forecast for a 4.0% gain and posting an eleventh consecutive month of expansion.
Compared from the previous month, retail sales expanded 1.9%, the data showed.
Japan’s economy, the world’s third-largest, is expected to post an annualised 1.4% expansion in January-March according to a Reuters poll, after weaker-than-expected 0.6% growth in the final quarter of 2022.
(Reporting by Kantaro Komiya; Editing by Shri Navaratnam)
