Japan's factory output experienced its sharpest decline since May 2020, according to government data released on Thursday, increasing worries about the country's fragile economy, which slipped into recession late last year.

Data from the Ministry of Economy, Trade and Industry (METI) revealed a 7.5 per cent drop in industrial output in January compared to the previous month, slightly worse than the market forecast of a 7.3 per cent decrease.

The downturn affected 14 out of 15 industries surveyed by METI, prompting the ministry to downgrade its assessment of industrial output for the first time since July last year.

Gabriel Ng, assistant economist at Capital Economics, expressed concerns about the implications of the sharp decline in industrial production. "The plunge in industrial production in January suggests that GDP will fall yet again this quarter, which will add to the view that Japan's economy is in recession" Reuters quoted him as saying.

Analysts fear that Japan's economic recovery may be stalling, especially with the manufacturing sector facing challenges.

The automotive industry bore the brunt of the production downturn, with output in motor vehicles plummeting by 17.8 per cent in January compared to the previous month.

The decline was attributed to decreases in regular passenger cars and electrical drive systems production.

Toyota Motor, a prominent Japanese automaker, suspended shipments of certain models in January due to irregularities found in certification tests for diesel engines developed by affiliate Toyota Industries.

Additionally, Toyota's small-car unit Daihatsu continued to suspend production at domestic plants following misconduct related to collision-safety tests.

The gradual resumption of operations by Daihatsu this month indicates efforts to address these challenges.

Kota Suzuki, an economist at Daiwa Securities, noted the significance of the slump in automobile-related production, stating its impact on the broader Japanese economy.

Suzuki stated, "The drop in automobile-related production, which had remained exceptionally strong amid stagnant (industrial) production due to weak global demand for goods, is a major blow to the Japanese economy."

The decline extended beyond the automotive sector, with manufacturing of electrical machinery and information and communication electronics equipment also experiencing an 8.3 per cent decrease.

Despite the outlook for January, manufacturers surveyed by the industry ministry anticipate a rebound in production in the coming months.

Forecasts indicate a 4.8 per cent increase in seasonally adjusted output for February and a further 2.0 per cent rise in March.

However, these projected gains may not fully offset the impact of January's decline, according to a METI official.

Meanwhile, uncertainties loom over the potential effects of a powerful earthquake that struck Japan's Noto Peninsula on New Year's Day, with its impact on manufacturers' plans yet to be fully understood.

In a separate report offering a glimmer of hope, Japanese retail sales rose by 2.3 per cent year-on-year in January, marking the 23rd consecutive month of increases and aligning with market expectations.

The resilience of retail sales provides some optimism that consumption may help alleviate pressure stemming from the downturn in the industrial sector, offering a potential avenue for economic recovery.

(With inputs from Reuters)

Japan's factory output experienced its sharpest decline since May 2020, according to government data released on Thursday, increasing worries about the country's fragile economy, which slipped into recession late last year.

Japan's factory output experienced its sharpest decline since May 2020, according to government data released on Thursday, increasing worries about the country's fragile economy, which slipped into recession late last year. Data from the Ministry of Economy, Trade and Industry (METI) revealed a 7.5 per cent drop in industrial output in January compared to the previous month, slightly worse than the market forecast of a 7.3 per cent decrease. The downturn affected 14 out of 15 industries surveyed by METI, prompting the ministry to downgrade its assessment of industrial output for the first time since July last year. Gabriel Ng, assistant economist at Capital Economics, expressed concerns about the implications of the sharp decline in industrial production. "The plunge in industrial production in January suggests that GDP will fall yet again this quarter, which will add to the view that Japan's economy is in recession" Reuters quoted him as saying. Analysts fear that Japan's economic recovery may be stalling, especially with the manufacturing sector facing challenges. The automotive industry bore the brunt of the production downturn, with output in motor vehicles plummeting by 17.8 per cent in January compared to the previous month. The decline was attributed to decreases in regular passenger cars and electrical drive systems production. Toyota Motor, a prominent Japanese automaker, suspended shipments of certain models in January due to irregularities found in certification tests for diesel engines developed by affiliate Toyota Industries. Additionally, Toyota's small-car unit Daihatsu continued to suspend production at domestic plants following misconduct related to collision-safety tests. The gradual resumption of operations by Daihatsu this month indicates efforts to address these challenges. Kota Suzuki, an economist at Daiwa Securities, noted the significance of the slump in automobile-related production, stating its impact on the broader Japanese economy. Suzuki stated, "The drop in automobile-related production, which had remained exceptionally strong amid stagnant (industrial) production due to weak global demand for goods, is a major blow to the Japanese economy." The decline extended beyond the automotive sector, with manufacturing of electrical machinery and information and communication electronics equipment also experiencing an 8.3 per cent decrease. Despite the outlook for January, manufacturers surveyed by the industry ministry anticipate a rebound in production in the coming months. Forecasts indicate a 4.8 per cent increase in seasonally adjusted output for February and a further 2.0 per cent rise in March. However, these projected gains may not fully offset the impact of January's decline, according to a METI official. Meanwhile, uncertainties loom over the potential effects of a powerful earthquake that struck Japan's Noto Peninsula on New Year's Day, with its impact on manufacturers' plans yet to be fully understood. In a separate report offering a glimmer of hope, Japanese retail sales rose by 2.3 per cent year-on-year in January, marking the 23rd consecutive month of increases and aligning with market expectations. The resilience of retail sales provides some optimism that consumption may help alleviate pressure stemming from the downturn in the industrial sector, offering a potential avenue for economic recovery. (With inputs from Reuters)

Japan's factory output plummets in January as economic concerns mount

Japanese Trade Minister Hiroshige Seko said on Tuesday it was "regrettable" that the South Korean government had made what he said was an erroneous explanation after the two sides sat down for a working-level meeting over Japan's export controls.

The feud between the two deepened over the weekend when they contested accounts of a frosty meeting last week on the dispute, which could threaten global supplies of microchips and smartphone displays.

Tokyo lodged a protest against Seoul, saying it had broken an agreement on what the two sides would disclose from the Friday discussions on Japan's curbs of exports to Korea of some materials used to make high-tech equipment, a Japanese trade ministry official said at the weekend.

Japan's Ministry of Economy, Trade and Industry (METI) also disputed a Korean official's statement that Seoul had asked Japan on Friday to withdraw the restrictions.

But a Korean trade ministry official shot back that Seoul had "clearly demanded Japan withdraw its trade restrictions at yesterday’s meeting, and there should be no disagreement over that matter with <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/world/more-acrimony-in-japan-south-korea-row-as-tokyo-lodges-protest-235529&amp;sa=U&amp;ved=2ahUKEwipm7SR97jjAhVK-2EKHV0YAdcQFjABegQIEBAC&amp;usg=AOvVaw2ep2wU2z8egmK_dl6grAZj">Japan</a>."

He told Reuters the two sides had discussed what they would disclose but that there was no agreement.

At a regular briefing on Tuesday, Seko disputed that claim, saying the officials had spent about an hour towards the end of the five-hour meeting to discuss and agree on what to disclose to media.

Japan recently tightened restrictions on the export of three materials used in high-tech equipment, citing what it has called "inadequate management" of sensitive items exported to <a href="https://www.wionews.com/business-economy/calls-for-boycott-of-japan-grow-in-south-korea-as-diplomatic-row-simmers-233755">South Korea</a>, as well as a lack of consultations about export controls.

But the dispute also appears to be rooted in a decades-old wartime disagreement. It comes amid deep frustration in Japan over what Tokyo sees as Seoul's failure to act in response to a South Korean court ruling ordering a Japanese company to compensate former forced labourers from the Second World War.

Seko repeated Japan's stance that its latest move - taken for reasons of national security - fell under the jurisdiction of individual countries and did not require checks from international bodies.

"The claim that (our latest steps) go against free trade ... is completely unfounded. If the topic is raised at the World Trade Organisation's (WTO) general council, we will firmly explain Japan's stance," Seko said.

Japanese Trade Minister Hiroshige Seko said on Tuesday it was "regrettable" that the South Korean government had made what he said was an erroneous explanation after the two sides sat down for a working-level meeting over Japan's export controls.

Japanese Trade Minister Hiroshige Seko said on Tuesday it was "regrettable" that the South Korean government had made what he said was an erroneous explanation after the two sides sat down for a working-level meeting over Japan's export controls. The feud between the two deepened over the weekend when they contested accounts of a frosty meeting last week on the dispute, which could threaten global supplies of microchips and smartphone displays. Tokyo lodged a protest against Seoul, saying it had broken an agreement on what the two sides would disclose from the Friday discussions on Japan's curbs of exports to Korea of some materials used to make high-tech equipment, a Japanese trade ministry official said at the weekend. Japan's Ministry of Economy, Trade and Industry (METI) also disputed a Korean official's statement that Seoul had asked Japan on Friday to withdraw the restrictions. But a Korean trade ministry official shot back that Seoul had "clearly demanded Japan withdraw its trade restrictions at yesterday’s meeting, and there should be no disagreement over that matter with Japan." He told Reuters the two sides had discussed what they would disclose but that there was no agreement. At a regular briefing on Tuesday, Seko disputed that claim, saying the officials had spent about an hour towards the end of the five-hour meeting to discuss and agree on what to disclose to media. Japan recently tightened restrictions on the export of three materials used in high-tech equipment, citing what it has called "inadequate management" of sensitive items exported to South Korea, as well as a lack of consultations about export controls. But the dispute also appears to be rooted in a decades-old wartime disagreement. It comes amid deep frustration in Japan over what Tokyo sees as Seoul's failure to act in response to a South Korean court ruling ordering a Japanese company to compensate former forced labourers from the Second World War. Seko repeated Japan's stance that its latest move - taken for reasons of national security - fell under the jurisdiction of individual countries and did not require checks from international bodies. "The claim that (our latest steps) go against free trade ... is completely unfounded. If the topic is raised at the World Trade Organisation's (WTO) general council, we will firmly explain Japan's stance," Seko said.

Japan trade minister blasts South Korea for 'mistaken' explanation after bilateral meeting

A row between <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/calls-for-boycott-of-japan-grow-in-south-korea-as-diplomatic-row-simmers-233755&amp;sa=U&amp;ved=2ahUKEwjkh4bL67HjAhWQOnAKHdK0CDwQFjAHegQIBBAC&amp;usg=AOvVaw1rNFlubgai0uu1K36l6Dq6">Japan and South Korea</a> escalated on Saturday, with contested accounts of a frosty meeting the day before that had failed to make progress on a dispute that could threaten global supplies of microchips and smartphone displays.

Tokyo lodged a protest against Seoul, saying it had broken an agreement on what the two sides would disclose from the Friday discussions on Japan's curbs of exports to Korea of some materials used to make high-tech equipment, said Japanese trade ministry official Jun Iwamatsu.

<a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/world/japan-restricts-chip-smartphone-materials-exports-to-south-korea-231877&amp;sa=U&amp;ved=2ahUKEwjl1rby67HjAhWGFYgKHYb8B_QQFjAAegQIARAC&amp;usg=AOvVaw29aGx03LnTm9o7nxEPuTA6">Japan's Ministry of Economy, Trade, and Industry (METI)</a> also disputed a Korean official's statement that Seoul had asked Japan on Friday to withdraw the restrictions.

But a Korean trade ministry official shot back that Seoul had "clearly demanded Japan withdraw its trade restrictions at yesterday’s meeting, and there should be no disagreement over that matter with Japan."

He told Reuters the two sides had discussed what they would disclose but that there was no agreement.

"I am frustrated," said the Korean official, who declined to be named due to the sensitivity of the matter.

Japan recently tightened restrictions on the export of three materials used in high-tech equipment, citing what it has called "inadequate management" of sensitive items exported to South Korea, as well as a lack of consultations about export controls.

But the dispute also appears to be rooted in a decades-old wartime disagreement. It comes amid deep frustration in Japan over what Tokyo sees as Seoul's failure to act in response to a South Korean court ruling ordering a Japanese company to compensate former forced labourers from the Second World War.

In the Friday talks, South Korean officials expressed regret over Japan's export restrictions and asked Tokyo to remove them, participant Han Cheol-hee, a trade ministry director, told reporters as he was leaving Japan on Saturday.

In response, Iwamatsu, director of METI's trade control policy division, told a hastily arranged news conference: "We've checked the record of the meeting ... We found no clear comment asking for the withdrawal."

Iwamatsu said the two sides had agreed on what they would disclose from the talks but that the Korean official went beyond the agreement.&nbsp;

"We believe this is something that affects our relationship of trust," he said.

One reason for the sensitivity over characterising the talks could be a Japanese fear that if Korea can assert that it used consultations and unsuccessfully sought to have Tokyo withdraw the curbs, Seoul could justify escalating the matter to the World Trade Organisation.

"The nature of the meeting is not a consultation, but an occasion where Japan gives an explanation after getting a request from the South Korean government," Iwamatsu said.

"Therefore we would like to correct expression from a South Korean official that the meeting can appropriately be described as consultation for problem-solving."

Friday's talks began with two negotiators from each side facing off in stony silence in a small meeting room, without greeting each other and with the Japanese officials not standing or bowing when their Korean counterparts entered.

A Japanese official later explained that the bureaucrats had earlier met and exchanged greetings. South Korean media, however, reported there was a "cold reception" for their officials, and that the meeting took place in a room that looked like a "garage".

A row between Japan and South Korea escalated on Saturday, with contested accounts of a frosty meeting the day before that had failed to make progress on a dispute that could threaten global supplies of microchips and smartphone displays.

A row between Japan and South Korea escalated on Saturday, with contested accounts of a frosty meeting the day before that had failed to make progress on a dispute that could threaten global supplies of microchips and smartphone displays. Tokyo lodged a protest against Seoul, saying it had broken an agreement on what the two sides would disclose from the Friday discussions on Japan's curbs of exports to Korea of some materials used to make high-tech equipment, said Japanese trade ministry official Jun Iwamatsu. Japan's Ministry of Economy, Trade, and Industry (METI) also disputed a Korean official's statement that Seoul had asked Japan on Friday to withdraw the restrictions. But a Korean trade ministry official shot back that Seoul had "clearly demanded Japan withdraw its trade restrictions at yesterday’s meeting, and there should be no disagreement over that matter with Japan." He told Reuters the two sides had discussed what they would disclose but that there was no agreement. "I am frustrated," said the Korean official, who declined to be named due to the sensitivity of the matter. Japan recently tightened restrictions on the export of three materials used in high-tech equipment, citing what it has called "inadequate management" of sensitive items exported to South Korea, as well as a lack of consultations about export controls. But the dispute also appears to be rooted in a decades-old wartime disagreement. It comes amid deep frustration in Japan over what Tokyo sees as Seoul's failure to act in response to a South Korean court ruling ordering a Japanese company to compensate former forced labourers from the Second World War. In the Friday talks, South Korean officials expressed regret over Japan's export restrictions and asked Tokyo to remove them, participant Han Cheol-hee, a trade ministry director, told reporters as he was leaving Japan on Saturday. In response, Iwamatsu, director of METI's trade control policy division, told a hastily arranged news conference: "We've checked the record of the meeting ... We found no clear comment asking for the withdrawal." Iwamatsu said the two sides had agreed on what they would disclose from the talks but that the Korean official went beyond the agreement. "We believe this is something that affects our relationship of trust," he said. One reason for the sensitivity over characterising the talks could be a Japanese fear that if Korea can assert that it used consultations and unsuccessfully sought to have Tokyo withdraw the curbs, Seoul could justify escalating the matter to the World Trade Organisation. "The nature of the meeting is not a consultation, but an occasion where Japan gives an explanation after getting a request from the South Korean government," Iwamatsu said. "Therefore we would like to correct expression from a South Korean official that the meeting can appropriately be described as consultation for problem-solving." Friday's talks began with two negotiators from each side facing off in stony silence in a small meeting room, without greeting each other and with the Japanese officials not standing or bowing when their Korean counterparts entered. A Japanese official later explained that the bureaucrats had earlier met and exchanged greetings. South Korean media, however, reported there was a "cold reception" for their officials, and that the meeting took place in a room that looked like a "garage".

More acrimony in Japan-South Korea row as Tokyo lodges protest

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