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Japan's September output likely fell as supply disruptions hit automakers: Reuters poll

Japan's September output likely fell as supply disruptions hit automakers: Reuters poll

People wearing protective masks to help curb the spread of the coronavirus walk along a pedestrian crossing on Mar 3, 2021, in Tokyo. (Photo: AP/Eugene Hoshiko)

TOKYO: Japan's factory output likely fell in September as supply chain disruptions continued to hit automakers, a Reuters poll showed, reinforcing expectations that growth in the world's third-largest economy cooled sharply in the third quarter.

Rising commodity prices and China's faltering recovery have recently added to headaches for Japanese manufacturers, clouding the outlook for the export-reliant economy, analysts say.

"Blackouts and soaring production costs in China pose additional headwinds to the recovery from the pandemic, besides parts supply issues in the coronavirus-hit Southeast Asia and the lasting global semiconductor shortage," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Industrial output likely fell 3.2 per cent in September month-on-month after dropping 3.6 per cent in August, according to a Reuters poll of 14 economists.

Separate data is also likely to show retail sales shrank 2.3 per cent in September from a year earlier following a 3.2 per cent fall in August, the poll showed.

"Consumer sentiment picked up to some extent as (COVID-19) infection peaked out, but supply limit-induced weakness in car sales worked as a downward pressure," Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

The batch of weak data would underscore the challenges new Prime Minister Fumio Kishida's ruling party face ahead of a general election on Oct 31.

The government will release the retail sales data on Oct 28 at 8.50am (7.50am, Singapore time) and industry output figures on Oct 29 at 8.50am (7.50am, Singapore time).

Japan's job data is likely to show the unemployment rate standing at 2.8 per cent in September and the job-to-applicants ratio at 1.14, the poll showed, roughly unchanged from August.

The consumer price index (CPI) in Tokyo - a leading indicator for nationwide price inflation - likely rose 0.3 per cent in October from a year earlier, picking up from a 0.1 per cent gain in the prior month.

The jobs and Tokyo CPI data will be released on Oct 29 at 8.30am (7.30am, Singapore time).

Japan's economy emerged from last year's pandemic-induced doldrums as robust exports offset some of the weakness in consumption. However, analysts now expect the economy grew just 0.8 per cent in July to September on an annualised basis, cooling from 1.9 per cent in April to June, due partly to softening factory output.

Source: Reuters/ng

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