Japan’s industrial output dropped in September compared to the previous month in an indication of the faltering economy of the country and soft global demand.
According to the data released Tuesday by the Ministry of Economy, Trade and Industry industrial production, which measures the change in the total inflation-adjusted value of output produced by manufacturers, mines and utilities, fell 4.1 percent in September down from a 1.6 percent decrease in August.
This comes after Japan's report earlier this month on the rise in trade deficit in September compared to the same month last year with a decrease in exports. Data from Japan’s Finance Ministry showed that the country recorded a 558.6 billion yen ($7.0 billion) trade deficit in September compared to a surplus of 288.8 billion yen last year.
Exports dropped 10.3 percent in September from a year earlier, indicating the soft global demand. There was a slump of 14.1 percent in exports to China compared to the previous year. The relationship between China and Japan took a bad turn after Tokyo said in September that it would buy the East China Sea islands claimed by both countries. The purchase of the islands for 2.05 billion yen ($26 million) was approved by Japan's cabinet on Sept. 11.
Protesters in China called for boycott of goods from Japan. Japanese companies such as Toyota Motor Corp, Honda Motor Co and Nissan Motor Co stopped production at certain plants in China.
While exports to Europe dropped 21.9 percent, exports to the U.S. rose 0.9 percent. The continuing debt crisis in Europe and the strength of the Japanese yen have also hurt the demand for exports, the key driver of Japan's economy.
Also it was reported earlier this month that Japan’s core machinery orders fell in August compared to that in the previous month, showing that there is an urgent need to take additional measures for enhancing the growth potential of the economy. According to the data released by the Cabinet Office, Japan’s core machinery orders declined 3.3 percent in August, down from 4.6 percent increase in July.
Meanwhile, the Ministry of Internal Affairs and Communications reported Tuesday that Japan’s unemployment rate, which measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month, remained at 4.2 percent in September, unchanged from the previous month.
The Ministry of Internal Affairs and Communications also reported Tuesday that Japan’s household spending, which measures the change in the inflation-adjusted value of all expenditures by consumers, fell 0.9 percent in September compared to the same month the previous year, down from 1.8 percent rise in August.
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