Japanese factory output unexpectedly returned to contraction territory in August following a rebound a month ago, while retail sales defied expectations of a yearly decline ahead of an impending sales tax hike in October, data from the economy ministry showed.
The seasonally adjusted industrial production index dropped 1.2% on a monthly basis to 101.5 in August, following a 1.3% increase in July. The consensus forecast of economists polled by Econoday was for industrial production to climb 0.3%.
Japanese industrial production "is in a weak tone recently," the ministry said. Production of iron, steel and nonferrous metals mainly contributed to the decline in factory output, followed by production machinery and motor vehicles.
Shipments dropped 1.4% on a monthly basis, while inventories remained unchanged. The inventory ratio rose 2.8% from July.
Meanwhile, retail sales in Japan rose 2.0% year over year to ¥12.054 trillion in August, rebounding from a 2.0% decline a month ago and exceeding the Econoday consensus forecast of a 0.4% drop. The data was released a day before the government's planned sales tax increase to 10% from 8% takes effect.
As of Sept. 27, US$1 was equivalent to ¥108.15.
