Automotive production bounces back in Japan

Japan’s industrial output slipped for the second straight month in November despite a bounce back in output of cars and car engines.

The drop raises the likelihood the economy will contract in the fourth quarter due to slowing demand abroad and at home.

Japan’s economy has cooled in recent months due to a prolonged hit to exports from soft global demand and a slide in consumer spending following a nationwide tax hike, reports Reuters.

Official data shows factory output fell 0.9 per cent in November from the previous month, which followed a 4.5 per cent decline in the previous month.

While production from the automotive industry increased, this was offset overall by a decrease in output of production machinery and information equipment.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to gain 2.8 per cent in December and rise 2.5 per cent in January, the data shows.

Separate data reveals retail sales fell 2.1 per cent in November as consumer sentiment stayed depressed following October’s sales tax hike.

The weak readings may force the government to find fresh ways to boost growth and force the central bank to maintain its stimulus program.

The broader economy is likely to stay under pressure as weak business and consumer confidence and a delayed pickup in global growth hurt demand.