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Japan’s factory output in October posted the highest growth since October 2015, far exceeding economists’ expectations and showed signs of life for manufacturers in an environment fraught with cooling factories plagued by trade wars.
Factory output grew by 2.9% for October on a year-on-year basis, following a revised 0.4% drop in September. Economists in a Reuters poll had expected a 1.2% gain. September saw a slump in factory activity as the nation was hit by a slew of natural disasters.
For November, manufacturers expect factory output to rise 0.6% before increasing by 2.2% in December, data from the Ministry of Economy, Trade and Industry showed.
Worsening job market conditions as economy softens
Separate data from Japan showed the job market worsening, with unemployment rising slightly and openings for job seekers shrinking. Markets had been expecting the unemployment rate to maintain at its current pace.
Japan’s unemployment rate edged up 2.4% in October from 2.3% in September. Jobs availability eased to 1.62 jobs per applicant from 1.64 jobs a month ago. This comes after employee wages saw a recent weakening in growth, with real wages declining by 0.4% in September after adjusting for inflation.
Economists had expected the jobs availability ratio to increase to 1.65 for October.
The employment situation in Japan reflects a weaker third quarter economic growth for the country which contracted by 0.3% from the previous quarter on a seasonally adjusted basis.
As wage growth and economic activity softens, it would be tough for the Bank of Japan to keep to its annual inflation target of 2.0%.
Japan’s Tokyo core consumer price index rose 1.0% from a year ago in November, in line with economists’ estimates. The index contains prices of oil products but excludes fresh food prices and serves as a key consumer inflation indicator to watch.
Following the slew of economic data reports released on Friday morning, at 3.36am coordinated universal time (UTC), the Japanese Yen changed hands at ¥113.41 against the United States dollar.