According to Yahoo News, Japan's industrial production experienced a higher-than-anticipated increase in October, demonstrating economic resilience as the weak yen supported exporters and encouraged inbound tourism. Factory output rose by 1% from the previous month, surpassing economists' predictions of a 0.8% gain. Production increased by 0.9% compared to the same period last year.
A separate report revealed that retail sales dropped by 1.6% in October from September, reversing after three consecutive months of gains. Economists had expected a 0.4% increase. Sales rose by 4.2% from the previous year, falling short of estimates. The production figures for October partly reflected the recovery of global supply chains. Japan's exports remained strong, primarily due to a significant increase in car shipments, particularly to the US. Auto sector output grew by 2% compared to the previous month. Other sectors that experienced growth included electronic devices and general machinery.
The rise in output occurred amid robust corporate activity. Confidence among Japan's large manufacturers improved more than expected in September compared to three months prior, as reported by the Bank of Japan in October. Sentiment for non-manufacturers reached its highest level in 32 years. The weak yen is enhancing profits for large manufacturers and increasing the spending power of inbound tourists, supporting a broad range of companies in the services industry. The Bank of Japan will use this data to evaluate the economy's progress towards achieving a positive wage-price growth cycle. The central bank's final policy meeting of the year will take place next month, with most observers anticipating no change.