Japan’s factory output seen rebounding in October

TOKYO: Japanese factory output is expected to have rebounded while consumer inflation ticked higher in October, a Reuters poll showed on Friday, providing upbeat signs for the economy at the start of the fourth quarter.

Industrial output probably rose 1.9% compared with September, when it fell 1.0%, according to the median forecast of 19 economists.

With exports getting a boost from solid global demand, production is likely to continue its recovery, economists say.

“Output is expected to show a steady rising trend,” said survey respondent Yoshiki Shinke, chief economist at Dai-ichi Life.

“Views will likely grow that there is a high possibility of output also rising for the October-December quarter,” he said.

The trade ministry will announce the factory output data at 8.50am on Thursday Japan time (2350 GMT Wednesday).

The core consumer price index, which excludes the volatile prices of fresh food but includes energy costs, is likely to have risen 0.8% year-on-year in October, the poll showed, after a 0.7% rise in September.

That would mark the 10th straight month of increases in the government’s key gauge of inflation, though it remains at less than half of the Bank of Japan’s 2% target.

The BoJ is hoping a tight job market will push up incomes, and subsequently inflation, but energy continues to be a key driver of prices. In September, consumer prices rose 0.2% after stripping out energy costs.

Highlighting the tightness of the labour market, the jobless rate is expected to have held steady at a 23-year low of 2.8% in October, while the jobs-to-applicants ratio was forecast at 1.53, a level last seen in 1974, the poll found.

Elsewhere, household spending is expected to have slipped 0.4% in October from a year earlier, dampened by a streak of bad weather including two typhoons. Similarly, October retail sales are forecast to have edged down 0.2% on the year.

The internal affairs ministry will publish the data on consumer prices, the job market and household spending at 8.30am on Friday (2330 GMT on Thursday).

Retail sales for October data is due out at 8.50am on Wednesday (2350 GMT Tuesday). - Reuters