World News

Japan Jan. factory output seen slowing, retail sales to fall: Reuters poll

TOKYO (Reuters) – Japan’s factory output likely slowed in January and retail sales fell for a fourth straight month, a Reuters poll showed on Friday, a worrying sign as the new coronavirus outbreak adds to threats to the economic outlook.

Recent data, including exports and machinery orders, have highlighted Japan’s fragile economy and the nation now faces risks from the virus outbreak, which has disrupted trade, supply chains and the tourism industry.

Industrial output is projected to have risen 0.2% in January from the previous month, the poll of 16 analysts found, well below a revised 1.2% gain in December.

“We expect adverse impacts from the coronavirus will appear at a full-scale in February and after,” said Koya Miyamae, senior economist at SMBC Nikko Securities.

“There is a chance factory output will contract for a third straight quarter in January-March.”

The poll also showed retail sales fell 1.1% in January from a year ago, following a 2.6% drop in December.

“Impacts from a sales tax hike continued and sales of autos and home electric appliances remained sluggish,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

The trade ministry will announce both factory output and retail sales at 8:50 a.m. Japan time on Friday, Feb. 28 (2350 GMT, Feb. 27).

Tokyo’s core consumer price (CPI) index, which includes oil products but excludes fresh food prices, likely rose 0.6% in February from a year earlier, slowing down from a 0.7% gain in January, partly due to falls in oil prices.

The poll also found the jobless rate was steady at 2.2% in January and the jobs-to-applicants ratio was also seen unchanged at 1.57.

Tokyo CPI data and job figures will be released at 8:30 a.m. on Friday.

Japan’s economy shrank at the fastest pace in almost six years in the December quarter as a sales tax hike hit consumer and business spending, raising the risk of a recession as China’s coronavirus outbreak chills global activity.

The impact of the new coronavirus outbreak on global growth will be a key issue at this weekend’s meeting of G20 finance leaders, said Bank of Japan Governor Haruhiko Kuroda said.

(Reporting by Kaori Kaneko; editing by Richard Pullin)