Japan Factory Output hits seventh-month downturn, hurts economy

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The factory production of Japan in November remained below the 50.0 level and marked its 7th consecutive decline on a monthly basis. Policymakers are now faced with a challenge to stir economic activity which continues to be at a slow pace this year.

The Jibun Bank Flash Japan Manufacturing Purchasing Manager’s Index (PMI) posted 48.6 from 48.4 in October. This remains to be below the threshold level that determines contraction and expansion.

However, the final reading for this month’s production will determine whether the manufacturing activity will mark its longest decline in six years.

“Slack in export demand, the protracted U.S.-China trade war and limited policy levers stack up the chances of an improvement in Japan’s economy,” said Joe Hayes, economist at HIS Markit.

“Without any dive from the service sector, a quarterly contraction in Q4 seems highly likely.”

 

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