| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | -0.9% | -1.2% to 0.1% | -1.2% | -1.6% | -1.2% |
| Year over Year | -0.9% | -1.1% to 1.7% | -1.3% | -0.9% | -0.4% |
Highlights
JAPAN AUG INDUSTRIAL OUTPUT -1.2% M/M (JULY REVISED UP TO -1.2% FROM -1.6%); 2ND STRAIGHT DROP; MEDIAN FORECAST -0.9% (RANGE: -1.2% TO +0.1%)
JAPAN AUG INDUSTRIAL OUTPUT -1.3% Y/Y (JULY REVISED UP TO -0.4% FROM -0.9%), 2ND STRAIGHT DROP; MEDIAN FORECAST -0.9% (RANGE: -1.1% TO +1.7%)
JAPAN METI KEEPS VIEW: INDUSTRIAL OUTPUT TAKING ONE STEP FORWARD AND ONE STEP BACK
JAPAN METI FORECAST INDEX: SEPT INDUSTRIAL OUTPUT +2.3% M/M (ADJUSTED FOR UPWARD BIAS), OCT +1.2%
JAPAN METI: AUG INDUSTRIAL OUTPUT M/M DROP LED BY LAPTOP/DESKTOP COMPUTERS IN PAYBACK FOR JULY GAIN ON WINDOWS OPERATING SYSTEM UPGRADE, ALUMINUM PRODUCTS HIT BY 50% TRUMP TARIFF ON METALS
JAPAN AUG INDUSTRIAL OUTPUT: 12 OUT OF 15 INDUSTRIES POST FALL, 3 ARE UP
Takeaway: The second straight y/y drop in Japan's factory output was worse than expected and just outside the economist forecast range. This month we saw a 30.1% m/m slump in laptop computers for August, pulling down overall production by 0.13 percentage point and more than wiping out the 29.2% rise (+0.09 pt) in the product in July. This is not so concerning as the recent surge in computer demand reflected the move among users to upgrade their Windows operating systems before Microsoft ends supporting Windows 10 in October.
What is concerning is the second largest negative contributor: Aluminum products were down 13.4% (-0.06 point), hit by the 50% U.S. import duties imposed on Japanese exports of iron and steel as well as aluminum goods for economic security reasons (reciprocal tariffs are basically 15%). This category was not list as among top upside or downside factors in the July IIP report. This indicates the drag from the still Trump tariffs is now showing in output data, which bodes ill for Japan's Q2 GDP data due Nov. 17.
JAPAN AUG INDUSTRIAL OUTPUT -1.3% Y/Y (JULY REVISED UP TO -0.4% FROM -0.9%), 2ND STRAIGHT DROP; MEDIAN FORECAST -0.9% (RANGE: -1.1% TO +1.7%)
JAPAN METI KEEPS VIEW: INDUSTRIAL OUTPUT TAKING ONE STEP FORWARD AND ONE STEP BACK
JAPAN METI FORECAST INDEX: SEPT INDUSTRIAL OUTPUT +2.3% M/M (ADJUSTED FOR UPWARD BIAS), OCT +1.2%
JAPAN METI: AUG INDUSTRIAL OUTPUT M/M DROP LED BY LAPTOP/DESKTOP COMPUTERS IN PAYBACK FOR JULY GAIN ON WINDOWS OPERATING SYSTEM UPGRADE, ALUMINUM PRODUCTS HIT BY 50% TRUMP TARIFF ON METALS
JAPAN AUG INDUSTRIAL OUTPUT: 12 OUT OF 15 INDUSTRIES POST FALL, 3 ARE UP
Takeaway: The second straight y/y drop in Japan's factory output was worse than expected and just outside the economist forecast range. This month we saw a 30.1% m/m slump in laptop computers for August, pulling down overall production by 0.13 percentage point and more than wiping out the 29.2% rise (+0.09 pt) in the product in July. This is not so concerning as the recent surge in computer demand reflected the move among users to upgrade their Windows operating systems before Microsoft ends supporting Windows 10 in October.
What is concerning is the second largest negative contributor: Aluminum products were down 13.4% (-0.06 point), hit by the 50% U.S. import duties imposed on Japanese exports of iron and steel as well as aluminum goods for economic security reasons (reciprocal tariffs are basically 15%). This category was not list as among top upside or downside factors in the July IIP report. This indicates the drag from the still Trump tariffs is now showing in output data, which bodes ill for Japan's Q2 GDP data due Nov. 17.
Market Consensus Before Announcement
Japan’s industrial production is forecast to post its second straight drop, down 0.9% on the month in August, following a 1.2% slip (revised up from -1.6%) as U.S. trade rows with the rest of the world are taking their toll on global and domestic growth. That would be a seventh fall in 12 months.
August trade data sent out an alarming signal that Japanese export volumes marked their first year-on-year dip in five months, down 3.9%. Export values were nearly flat, down 0.1%, for the fourth consecutive decline.
The monthly survey by the Ministry of Economy, Trade and Industry released last month indicated that output would slump 1.7% in August and slip a further 0.3% in September. Last month, the ministry maintained its assessment, saying industrial output is"taking one step forward and one step back."
From a year earlier, factory output is expected to have slipped 0.9% after falling 0.4% in July (revised up from -0.9%) and rising 4.4% in June.
August trade data sent out an alarming signal that Japanese export volumes marked their first year-on-year dip in five months, down 3.9%. Export values were nearly flat, down 0.1%, for the fourth consecutive decline.
The monthly survey by the Ministry of Economy, Trade and Industry released last month indicated that output would slump 1.7% in August and slip a further 0.3% in September. Last month, the ministry maintained its assessment, saying industrial output is"taking one step forward and one step back."
From a year earlier, factory output is expected to have slipped 0.9% after falling 0.4% in July (revised up from -0.9%) and rising 4.4% in June.
Definition
Industrial Production measures the physical output of the nation's factories, mines and utilities. Factories manufacture various products, and the industrial production indexes have been prepared as a comprehensive indicator of wide-ranging production activities for such products and are regarded as some of the most important among economic indexes.
Description
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
