factory output may recover slightly; inflation may dip
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[October 27, 2014]
By Kaori Kaneko
TOKYO (Reuters) - Japanese factory output
probably recovered in September, but only moderately, and consumer price
inflation may have dipped, a Reuters poll showed, adding to uncertainty
over whether the government will decide to raise the sales tax again
Other data next week will probably show that private spending
remained lackluster, while the unemployment rate may have ticked up
last month, according to the poll.
Industrial production probably rose 2.2 percent in September from
the previous month, the poll of 26 economists showed, after a
revised 1.9 percent decline in August.
That forecast is way below the 6.0 percent rise that manufacturers
surveyed by the trade ministry had expected when it released the
data for August last month.
"The economy is weak and exports lack momentum. Production activity
will probably keep going up and down," said an economist at Shinkin
Central Bank in the Reuters survey.
The trade ministry will release the factory output data on Oct. 29
at 8:50 a.m. (Oct. 28 at 1950 EDT). It will give manufacturers'
output forecasts for October and November at the same time.
Separate government data on Oct. 31 is forecast to show that core
consumer price inflation slowed in September, indicating the Bank of
Japan may need to adopt further easing steps to achieve its 2
percent inflation target for next fiscal year.
The nationwide core consumer price index, which includes oil
products but excludes volatile prices of fresh fruit, vegetables and
seafood, is expected to have risen 3.0 percent, the poll showed,
after a 3.1 percent gain in August.
Stripping out the impact of a sales tax increase in April, core
inflation is expected to be 1.0 percent, after 1.1 percent in August
and 1.3 percent in July.
Prime Minister Shinzo Abe has to decide this year whether to proceed
with another sales tax increase next October, taking it to 10
percent from 8 percent. April's increase from 5 percent caused the
world's third-biggest economy to shrink an annualized 7.1 percent in
the second quarter from the first.
Analysts in a separate Reuters survey forecast the economy would
only recover by an annualized 2.9 percent in the third quarter.
Core consumer prices in Tokyo, available a month earlier than the
national index, are forecast to rise an annual 2.5 percent in
October, down slightly from 2.6 percent in September.
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"Falls in gasoline prices reflecting an international resource price
decline will contribute to a slowdown in consumer price inflation,"
said an economist at Mitsubishi Research Institute.
Inflation data will be announced at 8:30 a.m. on Oct. 31. (Oct. 30
at 1930 EDT)
Despite recent weak data, the BOJ appears set to resist pressure for
more stimulus measures or to accept that its inflation target is
unrealistically high at a policy meeting on Oct. 31, according to
people familiar with its deliberations.
The trade ministry will announce retail sales for September next
Tuesday. The data is expected to show an annual 0.6 percent rise, up
for a third straight month but slower than the 1.2 percent gain in
Household spending is forecast to drop 4.3 percent in September from
a year before, the poll showed, down for a sixth straight month.
The jobless rate may have risen to 3.6 percent in September,
according to the poll, from 3.5 percent in August. And the
jobs-to-applicants ratio will probably be at 1.09, inching down from
the 1.10 marked in June, July and August, the highest in 22 years.
Household spending and labor market data will be announced at 8:30
a.m. on Oct. 31.
(Editing by Alan Raybould)
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