Japan’s Industrial Output Declines Lower Than Expected

Posted Monday, September 30, 2019 by
Arslan Butt • 1 min read

the industrial sector in Japan continues to be weighed down by the ongoing trade tensions between the US and China. According to a recent data release, Japan’s industrial output declined by 1.2% in August, reversing the 1.3% increase seen in July and coming in lower than economist expectations which were for a fall by 0.5%.

The contraction in industrial output was mainly driven by lower production of iron and steel items, factory equipment and automobiles, even as manufacturing of electronic goods and chemicals registered a rise in August. The US-China trade war has continued to impact Japan’s manufacturing and industrial output as China is one of its leading trade partners.

On account of the escalating trade war, Japan’s exports have also slid lower for the ninth consecutive month. Hopefully, the recently signed limited trade deal between the US and Japan could lift the mood in the markets and give a slight boost to Japanese exports.

On the release of this news, the Japanese yen weakened, with USD/JPY briefly crossing the 108 level before settling lower. At the time of writing, the Guppy is trading at around 107.78.

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