According to a recent Reuters poll, industrial output across Japan is expected to rise for the sixth consecutive month in November, indicating a rebound in the manufacturing activity. Factory output is forecast to increase by 1.2% MoM during November, lower than the 3.8% increase seen in the previous month.

Factory activity in Japan is on the rise after contracting severely earlier this year due to the coronavirus pandemic and resulting lockdowns across the country and most parts of the world. However, an improvement in demand for automobiles and IT-related products has helped boost the factory output over the past few months.

Despite the factory output posting an increase in November, analysts remain cautious as the latest wave of the pandemic across the US, Europe and other parts of the world are likely to have ripple effect on the sector soon. In addition, the uptick in factory activity was also driven by China’s economic rebound after containing the initial outbreak, which has since evened out.

Japan, the world’s third largest economy, was affected severely by the pandemic as its exports and domestic consumption levels plummeted earlier this year. The fresh spike in cases across Japan are also likely to keep economic recovery under pressure.