TOKYO (Reuters) - Japan’s factory output is expected to have risen for the first time in three months in December, a Reuters poll showed on Friday, offering some relief for an economy weighed down by sluggish global demand and a sales tax hike.
Retail sales likely fell for a third straight month in December as consumers cut back spending after the sales tax increase to 10% from 8% in October, but the rate of decline likely moderated slightly from the previous month.
Industrial output is expected to have grown 0.7% in December from the previous month, the poll showed, which would follow a 1.0% fall in November and a hefty 4.5% drop in October.
“Global recovery in the semiconductor sector helped output of electric parts and devices pick up,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Analysts believe factory output will probably rebound in the first quarter after an expected fall in the fourth quarter last year, but say any recovery will be moderate.
“As both external and domestic demand stay soft, the pace of increase in the factory output will likely be slow,” said Koya Miyamae, senior economist at SMBC Nikko Securities.
“Although the U.S. and China reached an initial trade agreement, adverse impacts from the trade war will likely drag.”
Retail sales were seen down 1.8% in December from a year ago, the poll showed, but less than a 2.1% decline in November and a 7.0% drop in October.
Analysts say the October sales tax hike continued to weigh on consumer spending and warm weather in December failed to help sales of winter clothes.
The trade ministry will publish both sets of data at 8:50 a.m. Japan time on Jan. 31 (2350 GMT, Jan. 30).
The poll also showed the jobless rate inched up 2.3% in December from 2.2 % in November and the jobs-to-applicants ratio was seen at 1.56 from 1.57.
The nation’s ageing and declining population has led to a tight labour market.
The job figures are due out at 8:30 a.m. Japan time on Jan. 31 (2330 GMT, Jan. 30).
The world’s third-largest economy expanded an annualised 1.8% in the third quarter thanks to resilient domestic demand and business spending. But analysts expect it contracted in the first quarter as the October tax hike hurt consumption.
Reporting by Kaori Kaneko; Editing by Kim Coghill