Japan factory output falls for second straight month

Japan factory output falls for second straight month

Japan's factory output fell for the second consecutive month in January as the auto sector grappled with production suspensions due to the coronaviruses and global supply shortages, raising the likelihood of an economic contraction.

Some analysts believe that the world's third-largest economy will slip into contraction in the current quarter due to a worldwide chip shortage and consumer sentiment suffering from surging Omicron infections.

Retail sales increased for the fourth consecutive month from a year ago in January, due to a flatter comparison to last year's low levels.

In January, factory output fell by 1.3% from the previous month, official data showed on Monday, hurting by falling production of cars as well as declining iron, steel and non-ferrous metals.

After slipping 1.0% in December, output extended declines to a second month came in weaker than a 0.7% loss forecast in a Reuters poll of economists.

Toyota Motor Corp and Suzuki Motor Corp have faced production cuts after being hit by supply chain disruptions and seeing pressure from a record surge in COVID-19 infections at home.

According to the data, production of cars and other motor vehicles fell 17.2% from the previous month in January, falling for the first time in four months.

The Ministry of Economy, Trade and Industry expects to increase output by 5.7% in February and 0.1% in March, according to the manufacturers surveyed by the Ministry of Economy, Trade and Industry.

Retail sales were slightly stronger than expected, rising 1.6% in January year-on-year compared to the median market forecast for a 1.4% rise.

Retail sales fell a seasonally adjusted 1.9% from the previous month, the second month downturn in a sign of the negative impact a surge of coronaviruses was having on momentum.