"This is another sign that growth is slowing, and reconfirms the weakness of business activity and domestic demand"
- Junko Nishioka, chief economist at RBS Securities Japan Ltd.
Japanese factory output tumbled more than expected in August, adding to evidence that the nation's economy is decelerating. According to the Ministry of Economy, Trade and Industry, industrial production fell 1.6 per cent in August from July, compared with a preliminary estimate of a 1.3 per cent decline.
"This is another sign that growth is slowing, and reconfirms the weakness of business activity and domestic demand," said Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo. "The corporate sector is hastily revising down investment plans."
Also Monday, Japanese government released its capacity utilization index, which indicates the ratio of production volume to capacity, with a final reading of -2.6%, compared with a previous reading of 0.5. This is the deepest fall since March 2011, when supply chains were disrupted by the earthquake and tsunami.
The Nikkei 225 Stock Average increased by 1.44 per cent, or 123.38 points, to 8,701.31. The broader Topix Index climbed 1.30 per cent, or 9.41 points, to 732.40.
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