Japan’s All Industries Activity Index Drops 0.3% In October

on November 20 2012 1:45 AM
Japanese Bank Note
The word Yen is pictured on a Japanese bank note at Interbank Inc. money exchange in Tokyo. Reuters
Japan’s all industries activity index fell in October compared to that in the previous month, indicating that the weak global demand was continuing to have its impact on the country’s economy.

According to the data released Tuesday by the Ministry of Economy, Trade and Industry, Japan’s all industries activity index, which measures the monthly change in overall production by all sectors of the Japanese economy, fell 0.3 percent in October, down from zero percent change in September but better than the analysts’ expectation of a 0.4 percent decrease.

This report comes after it was reported last week that Japan’s industrial output declined in September compared to that in the previous month.

According to the data released last week by the Ministry of Economy, Trade and Industry, Japan’s industrial production, which measures the change in the total inflation adjusted value of output produced by manufacturers, mines and utilities, fell 4.1 percent in September compared to that in the previous month while it declined 4.1 percent in August.

Japan's gross domestic product contracted in the third quarter compared to that in the previous quarter due to the soft global demand and the weakening domestic consumption in the world's third biggest economy.

According to the data released by the Cabinet Office, Japan’s GDP, which measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy, shrank to 0.9 percent in the quarter ending September 30, down from a 0.1 percent rise in the previous three months.

Last month, it was reported that Japan’s manufacturing activity contracted in October to an 18-month low, increasing the concerns about the slowdown in the economic growth of the world's third largest economy.

According to the data released by Markit/JMMA last month, the headline Purchasing Managers’ Index fell to 46.9 in October, down from 48 in September. Any index number below 50 indicates an economic contraction. The continued shrinking of the country's manufacturing activity would increase the likelihood of a sharp contraction in the economy.

The continuing debt crisis in Europe and the strength of the yen have also hurt the demand for exports, the key driver of Japan's economy.

Meanwhile, the market participants feel that Japan’s economy will need strong support, especially with the country’s core consumer prices continuing to fall in September, indicating that deflation persists to impair the economic growth prospects. The data released by Japan’s Statistics Bureau show that the consumer prices declined to 0.1 percent in September from those in the earlier year, down from a 0.3 percent fall in August.

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