Industrial Production Declines in Japan While Retail Sales Soar

Forex - Japan's economy is gaining strength, but the momentum is uneven as indicators show healthy growth in inflation and retail sales while industrial production has declined.

Industrial production fell in November for the first time in three months, indicating that the softness in overseas demand has harmed the export-driven economy.

Due to contractions in chip equipment and automobile production, industrial production in November decreased by 2.3% compared to the previous month, raising doubts about the strength of Japan's fragile economic recovery. The market had expected a 3.4% decline in production in November.

Japanese companies are anticipating a 2.1% increase in industrial production in November compared to the previous month, with a projected rise of 1.3% in January.

According to the reported data, retail sales rose by 2.8% year-on-year in November, following a 1.3% increase from the previous month.

Economists attributed the increase in sales to holiday shopping and demand for winter clothing and products spurred by cooler weather.

Further data indicating tightness in the labor market is also a positive sign, showing upward pressure on wages. The unemployment rate in November remained unchanged at 2.5% compared to the previous month.