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Japanese Industrial Output Falls in December Amid Reduced Demand and Rising Costs

Japan’s Ministry of Economy, Trade and Industry (METI) has reported a slight decrease in the country’s industrial output for December. This marks a challenging end to the year for manufacturers, who are facing slowing global demand and rising costs.

Despite higher-than-expected retail sales, a measure of service sector activity and consumer spending, production activity continues to decline. Companies are facing calls for higher wages to support Japan’s economic recovery from the COVID-19 pandemic.

The data shows that Japan’s industrial output declined by 0.1% month-over-month in December, which was less severe than the 1.2% drop predicted by the market. The output had increased by 0.2% in November.

Manufacturers surveyed by METI expect industrial output to be flat in January and to rise by 4.1% in February. Official surveys are likely to show a positive trend.

The quarterly industrial output saw a 3.1% decrease in Oct-Dec, marking the first drop in two quarters.

According to a recent survey, Japan’s economy is expected to grow by 3.0% year-on-year in Oct-Dec, driven by strong consumption, after shrinking more than expected in July-Sept.

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