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More economic gloom in Japan

December 28, 2012

Japan's industrial production has dipped far more than expected by analysts. The strong national currency and a territorial dispute with China are still weighing heavily on the world's third-largest economy.

https://p.dw.com/p/17AD0
Worker checking Toyota cars
Image: picture-alliance/dpa

Japanese production dipped to a seasonally adjusted 1.7 percent in November, fresh data from the new conservative government in Tokyo showed on Friday. The decline was much worse than the 0.5-percent decrease predicted by analysts.

The Ministry of Economy, Trade and Industry said in a statement the marked slowing of industrial output was mainly due to lower production levels in the general machinery, fabricated metals and electronics equipment sectors.

The November tumble which followed a 1.6-percent uptick in the previous month hinted to the daunting task the new government of Prime Minister Shinzo Abe was confronted with. But according to Masamichi Adachi from JPMorgan Securities Japan, domestic production would turn positive again in the first quarter of 2013.

Bilateral spat

"And that will probably lead to positive growth in the gross domestic product as well," Adachi told Dow Jones Newswires.

So far, though, Japan's economy keeps feeling the impact of a strong yen, turmoil in the eurozone and the global economic slowdown. A territorial dispute with Beijing has also been affecting exports due to a consumer boycott in China.

Tokyo's shipments to China dropped by 38 percent in November from the same month a year earlier. That pushed exports to the US ahead of those to China for the first time in nearly a year.

hg/hc (dpa, AFP)