The rather impressive increase in Japanese factory output was caused by a surge in the production of cars and motor vehicles. However, the Yen weakened against the US Dollar.
On Tuesday (28/December), the Japanese Cabinet office released data on Industrial Production or factory output which jumped 7.2 percent on a monthly basis (Month-over-Month) in November. This figure is quite impressive because it managed to exceed expectations for an increase of 4.8 percent, and jumped from the previous month's achievement of only 1.8 percent.
Japanese Factory Output Soars, Jobless
The surge in factory output was largely driven by a recovery in global parts supply. This prompted an increase in automotive production in line with solid demand for motorized vehicles from abroad. Unmitigated, the production of Japanese cars and motor vehicles increased sharply to 43.1 percent on a monthly basis. In addition, plastic products also supported factory output by posting a 9.5 percent increase from the previous month.
Despite the satisfactory achievement, Japanese automotive manufacturers admit that they have not been able to completely escape the problem of supplying spare parts and raw materials for semi-conductors. In addition, the health crisis and supply bottlenecks caused by the pandemic are still being felt by the Japanese industrial sector.
Leading automaker Toyota will even plan to suspend production at five domestic plants in January due to supply issues and pandemic concerns.
Regarding the future outlook, Japan's Ministry of Economy, Trade and Industry estimates that Japanese factory output will rise 1.6 percent in December and jump 5.0 percent in January 2022. The outlook is based on the results of a survey of Japanese manufacturers.
Risk-Off Reducing, Yen Loses Against US Dollar
Apiknya Japanese factory output data this morning failed to support the position of the Yen against the US Dollar. The USD/JPY pair is currently moving around 114.86, continuing the previous day's rally which scored a 0.41 percent gain. Broadly speaking, the US Dollar has benefited from the easing of the risk-off sentiment in recent days.
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