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Tokyo / AFP
Japan’s factory output ticked up in October, expanding for the third month in a row, government data showed on Wednesday. Industrial production grew 0.1 percent on-month, following a 0.6 percent increase in September.
“Activity is now well above the lows reached earlier this year, but there is still a long way to go to reach the peak ahead of 2014’s sales tax hike,†Marcel Thieliant, senior economist at Capital Economics, said in a commentary.
The consumption tax rise two years ago hammered spending and pushed Japan into a brief recession. Wednesday’s figures come a day after separate data showed that spending among Japanese households fell for an eighth straight month in October, even as the unemployment rate sits at a 21-year low.
Meanwhile, inflation was also weak with core consumer prices, which exclude volatile fresh food costs, falling again last month to extend its longest run of declines for five years. Next week, Japan publishes revised GDP figures for the third quarter.
Initial data showed the world’s number three economy grew a better-than-expected 0.5 percent between July and September, for an annualised 2.2 percent gain. Japan’s economy contracted in the last three months of 2015, before bouncing back in January-March with a 0.5 percent rise on-quarter and then a tepid 0.2 percent expansion in April-June.
The wobbly growth trend has put Japanese officials under pressure to deliver as economists increasingly write off Prime Minister Shinzo Abe’s bid to cement a lasting recovery, dubbed Abenomics. Abe came to office in late 2012 and launched a growth plan — a mix of massive monetary easing, government spending and red-tape slashing. The plan sharply weakened the yen — fattening corporate profits — and set off a stock market rally that spurred hopes for a once-soaring economy caught in a deflationary spiral of falling prices and lacklustre growth. But promises to cut through red tape have been slower, and Abe’s plan to buoy Japan’s once-booming economy have looked increasingly unrealistic.