Factory activity across Japan faltered during the month of November, halting a rise over the previous five months, and heightening worries about the economic impact of latest wave of the coronavirus pandemic around the world. According to data released by the government, Japan’s industrial output remained flat in November, showing no change from the previous month, following a 4% MoM increase seen in October.

Economists had anticipated a rise of 1.2% MoM for November’s industrial output instead. Factory output suffered on account of a decline in the output of automobiles and plastic items despite a pick-up in industrial production and output of general machinery.

In more worrying news for the Japanese economy, manufacturing firms polled by the METI forecast a decline of 1.1% in the month of December; however, they expect industrial output to rebound higher by 7.1% in January 2021. The fresh wave of the pandemic that has struck the US, parts of Europe and other countries could bring down the demand for goods manufactured in Japan once again, which could have a severe impact on its export-oriented economy in the coming months.

Meanwhile, Japan is also reeling under a resurgence of fresh coronavirus infections that threatens to derail some of the recent economic recovery. This is likely to pressure domestic consumption as well as corporate spending, and drive further weakness in the world’s third largest economy.