Japan’s January factory output rises for first time in three months Reuters via biedex.markets

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By Daniel Leussink

TOKYO (Reuters) – Japan’s industrial output rose for the first time in three months in January thanks to a pickup in global demand, in a welcome sign for an economy struggling to shake off the drag of the coronavirus pandemic.

But retail sales, a key gauge of consumer spending, posted their second straight month of declines in January as emergency measures taken in response to the pandemic hit consumption.

Official data released on Friday showed factory output advanced 4.2% in January, boosted by sharp rises in production of electronic parts and general-purpose machinery, as well as a smaller increase in car output.

The rise in output offset the previous month’s 1.0% fall, and was largely in line with a 4.0% gain forecast in a Reuters poll of economists.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to grow 2.1% in February, followed by a 6.1% decline in March.

The government kept its assessment of industrial production unchanged, saying it was picking up.

Factory output fell in November and December as a rebound in car production ended on sagging global demand, but since then strong demand for tech-making equipment and electronic goods has helped turn the tide.

Still, some analysts worry that Japan’s economic recovery will remain hobbled by fragile conditions abroad and weaker demand at home during the first half of this year as lockdown measures taken around the world to contain the COVID-19 crisis weigh.

The government also released data on Friday showing retail sales fell 2.4% in January compared with the same month a year earlier, in a sign households kept their purses shut as the coronavirus staged a resurgence.

The fall was in line with a 2.6% drop seen by economists in a Reuters poll, and followed a revised 0.2% fall in December.