Japan’s industrial production fell more sharply than expected in November, while retail sales recorded modest growth, pointing to an uneven economic recovery. Weak overseas demand continues to pressure manufacturers, particularly those reliant on exports, as global conditions remain challenging.
Industrial output declined by 2.6% month on month, exceeding forecasts for a 1.9% drop and reversing from a 1.5% increase in the previous month. The data highlighted ongoing strain on Japan’s manufacturing sector, as companies face slowing global demand and cautious capital spending from international customers.
Retail sales increased 1% year on year in November, slightly outperforming expectations of a 0.9% rise. However, the pace of growth eased compared with a 1.7% gain in the prior month, suggesting that consumer spending momentum may be stabilising.
Private consumption has been a key contributor to Japan’s inflation in recent years and played an important role in the Bank of Japan’s decision to raise interest rates. The contrast between weak factory output and steady consumer spending underscores the mixed signals shaping Japan’s economic outlook.
