Daily Times

Japan’s factory output is expected to have slipped for a second straight month in December, a Reuters poll found on Friday, in yet another sign slowing global demand and trade frictions would hobble the economy for much of this year.

Industrial production was forecast to fall 0.4 percent in December from the previous month after a 1.0 percent decline in November, the poll of 16 economists showed.

“The trend of factory output is not strong,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“Exports are at a standstill because external economies are slowing down, so there is a chance that the factory output will stagnate.”

Worries are growing about the repercussions on Japan’s economy from trade frictions between the United States and China. Already, there are indications businesses will be facing increasing pressure to safeguard margins and profits, with Japanese exports in December falling the most in more than two years, dragged by plummeting shipments to China.

The world’s third-biggest economy contracted in the third quarter and though a recovery is widely expected to have taken root, many analysts believe the external pressure will keep growth below-par.

“Exports of semiconductor manufacturing equipments and autos are weakening especially to China amid the global economy is decelerating,” said Asuka Sakamoto, economist at Mizuho Research Institute.

The trade ministry will release the factory output data at 8:50 am. Jan. 31, Japan time (2350 GMT Jan. 30).

Published in Daily Times, January 26^th 2019.