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Japan Nov factory output seen down for first time in 3 mths

Japan’s factory output probably fell in November for the first time in three months and retail sales also likely slipped, a Reuters poll showed, pointing to a slow recovery for the stagnant economy.

The nation’s industrial production likely fell 0.6 percent in November from the previous month, the poll of 20 analysts found, after rising 1.4 percent in October and 1.1 percent in September.

“Inventory adjustments have been progressing and there is some recovery in exports, while domestic demand remains weak,” said Tatsushi Shikano, deputy chief economist at Mitsubishi UFJ Morgan Stanley.

“It’s still too early to say there’s a steady recovery in factory output but I think it has already hit bottom.”

The trade ministry will announce factory output figures on Dec. 28 at 8:50 am (December 27 at 2350 GMT).

Retail sales data, a key gauge of consumer spending, will also be published on Monday at that time.

The poll pointed to a 0.6 percent drop in retail sales in November from a year earlier following 1.8 percent growth in October.

“Other consumer sales-related data such as department store sales have shown weak figures, partly due to weather-related factors,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“But I think the basic trend of consumer spending is toward a recovery, since wage conditions aren’t too bad, although it is not strong.”

The government plans record spending in its fiscal 2016 budget to help revive the economy, while policymakers have been putting pressure on companies to divert more of their record profits to capital spending and wages, seen as key drivers of economic growth.

Last week, the BOJ fine-tuned its stimulus program to ensure it can keep up or even accelerate its money-printing to achieve its inflation target.

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