Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Japan's Oct factory output falls again on global slowdown, weak chip demand

Economy Nov 29, 2022 10:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Workers check the machinery at the factory of aircraft component manufacturer Aoki in Higashiosaka, Japan June 22, 2022. REUTERS/Sakura Murakami/File Photo
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

By Kantaro Komiya and Kaori Kaneko

TOKYO (Reuters) - Japan's factory output fell for a second consecutive month in October, as stalling global demand and lingering supply bottlenecks put a lid on Japanese manufacturers' production plans.

The feeble business activity highlights challenges for the world's third-largest economy, which has been lagging behind peers in recovering from the pandemic even as the government readies another stimulus package to counter 40-year-high inflation.

"The pickup in production is pausing. For October-December, (Japan's) production will likely be almost flat or slightly decrease from the previous quarter," said Shumpei Fujita, economist at Mitsubishi UFJ (NYSE:MUFG) Research and Consulting, pointing to the global economic slowdown as a culprit.

Factory output fell 2.6% in October from a month earlier on a seasonally adjusted basis, government data showed on Wednesday. The dip was larger than economists' median forecast of a 1.5% decline and followed a revised 1.7% decrease in September.

Production machinery output slipped 5.4%, taking a hit from soft demand for equipment to make semiconductors and flat-panel displays. Electronic parts and devices output decreased 4.1% as semiconductors and liquid crystal panels were weak.

Decreasing demand for smartphones and electronic devices in big markets such as China led to the weak output in related sectors, a Ministry of Economy, Trade and Industry (METI) official told a media briefing.

But production in the auto-related sector, a key industry for Japan Inc with many suppliers involved, advanced 5.6%. While output of compact cars for the domestic market grew, production and shipment of export-oriented larger vehicles was down due to chip shortages, the METI official said.

METI cut its assessment of industrial output for the first time in five months, saying "production is gradually picking up, but some weaknesses are observed".

Manufacturers surveyed by METI expected output to rise 3.3% in November and another 2.4% in December, although the forecast figures are normally more bullish than actual results.

Fresh COVID-19 outbreaks in Chinese cities pose another risk to Japan's production outlook, as major Japanese carmakers including Toyota and Honda said they have adjusted production in China due to local lockdowns.

The impact of China's recent lockdown remains unclear, the METI official said, adding the spill-over effects for Japanese manufacturers may only appear in November or December statistics.

After a surprise contraction in July-September, economists forecast annualised 3.1% growth in Japan's October-December gross domestic product, a Reuters poll showed on Tuesday.

To counter increasing costs for households and businesses, partly exacerbated by the yen's decline this year to three decade lows, Japanese Prime Minister Fumio Kishida has sought another 29 trillion yen ($210 billion) extra budget, which will likely pass the parliament later this week.

Toward the first half of 2023, "weaker production and exports, coupled with curbs on consumption amid inflationary pressure, may result in a slowdown in Japan's economy," said Takeshi Minami, chief economist at Norinchukin Research Institute.

($1 = 138.7500 yen)

Japan's Oct factory output falls again on global slowdown, weak chip demand

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email