Japan Apr factory output seen posting first fall in 3 months on China lockdown – Reuters poll

Smoke rises from a factory during the sunset at Keihin industrial zone in Kawasaki, Japan, January 16, 2017. REUTERS/Toru Hanai/File Photo

TOKYO, May 27 (Reuters) – Japan’s factory output likely fell in April for the first time in three months as some manufacturers took a hit from strict COVID-19 lockdowns in Shanghai and other industrial centres in China. read more

Japanese industrial production likely dropped 0.2% in April from the prior month, according to the median forecast in a poll of 18 economists.

That would mark the first decline since January and follow a 0.3% gain in March.

“Exports were quelled by China’s lockdown, which likely affected (Japanese) production, especially in general and electrical machinery sectors that have higher export exposure to China,” said economists at SMBC Nikko Securities.

Automakers, including Toyota Motor Corp (7203.T) and Mazda Motor Corp (7261.T), have also been forced to cut domestic production plans due to rigorous curbs to combat the coronavirus spread in China. read more

The effect of Chinese anti-COVID controls creates another downside worry for Japanese manufacturers this summer, adding to existing supply bottlenecks and a rise in raw material costs, analysts said.

The poll also showed April retail sales were likely 2.6% higher than a year earlier, marking the second month to show an annual rise, thanks to the full lifting of COVID curbs in late March.

The industry ministry will release factory output and retail sales data on May 31 at 8:50 a.m. (May 30 at 2350 GMT).

Japan’s unemployment rate was seen steady at 2.6% in April while the jobs-to-applicants ratio likely rose 0.01 to 1.23, according to the poll. Jobs data are due on May 31 at 8:30 a.m. (May 30 at 2330 GMT).

Reporting by Kantaro Komiya; Editing by Bradley Perrett

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