Japan's Industrial Sector Dropped to 1.5% in September

Japan’s industrial production was anticipated to decline in September following a rigid profit in the previous month as shown in the Reuters poll. Nonetheless, analysts predict that the trend will still head northward due to more global demand.

The industrial output dropped to 1.5 percent last month compared in August following the revision of growth by 2.0 percent based on the survey conducted by 19 economists.

A chief economist at SMBC Nikko Securities described that the factory output has been moving high and low for the year which would imply an increase in the trend that is if the monthly has reached an average output.

A higher domestic demand, as well as foreign ones, supported the rise in output particularly to exports. Moreover, a rising demand in the global economy and a weaker yen has improved Japan’s exports which is favorable for the manufacturers as said by Maruyama.

The trade ministry is scheduled to publish their factory data at on Tuesday at 8:50 am Japan Time (23.50 GMT on Monday).

The Bank of Japan will most likely maintain the short-term interest rate at minus 0.1 percent. At the same time, the 10-year government bond yield target is estimated to be at zero percent the following week.

On the other hand, the predictions for the prices are to be kept unchanged by the central bank due to flat inflation which is driven by various corporations to enhance productivity. This induces the bank to put on hold in improving their stimulus program for now.

According to the poll, the retail sales are predicted to rise by 2.5 percent in  September compared last year which has increased for the past 11 months. On another side, the household spending rises to 0.7 percent annually for the month compared to 0.6 percent in August.

The unemployment rate in Japan is predicted to maintain the current 2.8 percent in September even if jobs-to-applicants ratio levels at 1.53 which was the previous level in February 1974.

On Monday, the trade ministry will release the retail sales data at 8:50 a.m. (2350 GMT on Sunday) followed by the data on the labor market and household spending data at 8:30 a.m. on Tuesday (2330 GMT on Monday).