Japan’s Industrial Production Projected to Shrink in November Amid Auto Industry Slowdown

Summary

  • It is expected that Industrial production in November will experience a decline of 1.6% compared to October.
  • The automobile industry’s production recovery, which has supported industrial output, shows recent signs of a slowdown.
  • Novembers’s export performance, in particular, was not robust, falling for the first time in three months due to slow chip shipments to China.
  • Electronic components, devices, and electric machinery outputs are anticipated to take a hit in November, a response to the significant surge the previous month.
  • The industrial production data for November will be released by the government on December 28th.

Projections for November Industrial Production

Predictions indicate a 1.6% contraction in November’s industrial production compared to the preceding month, based on 17 economists’ median estimates. Conversely, a 1.3% increase was observed in October.

Automobile Industry’s Production Recovery Slows

According to Chisato Oshiba, an economist at Dai-ichi Life Research Institute, the vehicle industry’s production recovery has been the mainstay of industrial output, but it has seen a recent deceleration. Exports were notably feeble in November.

“Industrial production is enduring fluctuations due to languid domestic demand for goods and a slowdown in overseas economies, hinting at a steady downturn.”

Exports Fall in November

Japan’s exports in November declined for the first time in three months, affected primarily by a slowdown in China-bound chip shipments.

Decline Anticipated for Electronic Components and Machinery Outputs

Shunpei Fujita, an economist at Mitsubishi UFJ (NYSE:) Research and Consulting, anticipates decreased output in electronic components and devices, as well as electric machinery, in November as a counteraction to the significant surge witnessed the prior month.

Release of November Industrial Output Data

The government is set to publicize the industrial output figures for November at 0850 a.m. local time on Dec. 28 (2350 GMT, Dec. 27).

This data and the trends derived from it could shape future forex strategies and influence the choice of tradable assets within the impacted sectors.

PIP Penguin
Logo