Japan's Factory Output Decline

Japan's factory output contracted at a slower-than-expected pace in November, according to government data released on Friday.

Industrial output fell 2.3% in November compared to the previous month, missing the median market forecast of a 3.4% decline, and contrasting with a 2.8% rise in October, as reported by the Ministry of Economy, Trade and Industry (METI).

Manufacturers surveyed by METI anticipate a seasonally adjusted output decline of 2.1% in November and 1.3% in December.

Additionally, separate data indicated that Japanese retail sales increased by 2.8% in November year-on-year, surpassing expectations of 1.5% growth.

These figures will be closely watched for their implications on the Bank of Japan's (BOJ) policy decisions, especially as policymakers assess domestic resilience against global economic challenges and political uncertainties.

The BOJ is predicted to raise its policy rate by 25 basis points at an upcoming meeting in January, following an unchanged rate this month.

Earlier this week, BOJ Governor Kazuo Ueda noted that the economy is expected to make progress toward sustainably meeting the central bank's 2% inflation target next year, suggesting that an interest rate hike may be imminent.