Japan’s Industrial Production Falls 4.1% In September

Japan’s industrial output declined in September compared to that in the previous month, indicating that the weak global demand is 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 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.

This report comes after it was reported Monday that 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 Wednesday, 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.

Last month, the Bank of Japan announced more monetary easing policies by expanding the asset purchase program (APP) by about 11 trillion yen ($138-billion). This brings the total size of the APP to about 91 trillion yen, of which 25 trillion yen is in loans and the remaining 66 trillion yen is for asset purchases. The policy board agreed a further 5-trillion yen each of Japanese government bonds and treasury bill purchases and announced 0.91 trillion yen of purchases of risk assets.