-Etsuro Honda, professor at University of Shizuoka
Japanese industrial production probably slightly recovered in September, whereas consumer price inflation may have fallen, adding to uncertainty whether the Japanese government will proceed with a planned sales tax hike again next year. Moreover, unemployment rate may have increased last month. Japan's factory output probably climbed 2.2% in September from a month earlier following the revised 1.9% drop in August. Separate government data on 31 October is seen to show that core consumer price inflation slowed in September, adding to signs the Bank of Japan may need to deploy further easing steps to reach its 2% inflation target for next fiscal year.
Prime Minister Shinzo Abe has to decide this year whether to proceed with another sales tax increase next October, lifting it to 10% from 8%. April's hike from 5% caused the world's third-biggest economy to contract an annualized 7.1% in the three months through June. A top Japanese government official believed Prime Minister Shinzo Abe should delay a planned sales-tax increase by a year and a half to April 2017, the strongest sign yet that economic weakness is causing concern among politicians that are close to the Premier ahead of the difficult tax decision. However, the Finance Ministry, the Bank of Japan and major corporations urge Abe to raise the tax as planned next year to keep Japan's pledge to cut the biggest debt burden in the industrial world.
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