Thu, Oct 31, 2013 - Page 15 News List

Domestic demand lifts Japan output


Japan’s factories boosted output last month, data showed yesterday, reversing a slide in the previous month owing to stronger domestic demand and highlighting that the world’s third-largest economy is gathering steam.

Industrial production rose 1.5 percent month-on-month, compared with a revised fall of 0.9 percent in August as demand among Japanese consumers for electronics and cars rose ahead of a sales tax hike next year.

Over the three months to September, Japan’s plants expanded production by 1.8 percent.

Takeshi Minami, an economist at Norinchukin Research Institute in Tokyo, said the data pointed to a recovery that is “continuing steadily,” propped up by improving demand at home, while Japan’s export picture remains tepid with unsteady demand overseas.


The fresh Japanese production figures come after separate data released on Tuesday showed that the nation’s thrifty households boosted their spending last month, while the unemployment rate fell.

The 3.7 percent on-year jump in spending — the best result in six months — far outstripped economists’ expectations.

However, a producers’ survey released with the industrial production figures showed that manufacturers have mixed expectations over the coming months, forecasting a 4.7 percent output increase next month before a decline of 1.2 percent next month.

“The outlook for the manufacturing sector remains buoyant,” London-based Capital Economics said in a note.

“While the October forecast will likely turn out too optimistic, there is a good chance that industrial production will finally return to the levels observed at the beginning of last year in the coming months,” it said.


Separately, Japan Tobacco (JT) plans to slash 1,600 jobs and close four factories, downsizing domestic cigarette production as sales decline at home, media reports said yesterday.

In a major overhaul, JT will cut about a fifth of its 8,900 workforce in its core tobacco business, public broadcaster NHK said.

In addition to the job cuts, which the company wants to make through voluntary retirement and other schemes, it will close four out of nine factories in Japan and reduce its number of branch offices from 25 to 15, the broadcaster said, citing unnamed sources.

JT said the company “has not made any decisions” about its domestic tobacco business.

“The company constantly considers various measures on strengthening its competitiveness,” it said in a statement.

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