Japan: Industrial production to weaken in January 2018 - Nomura

Analysts at Nomura suggest that Japanese production forecasts for January 2018 are weak and transport equipment is expected to see a particularly sharp decline.

Key Quotes

“Manufacturers’ forecasts look for production to weaken in January 2018, and suggest a slow start to 2018. Production forecasts look for a 4.5% m-m decline in January (-4.6% on an adjusted basis), down 2.2% (-3.4%) versus the Oct-Dec 2017 average.”

“Transport equipment is expected to be largely behind the drop off in production, with forecasts pointing to an 11.9% drop versus the adjusted Oct-Dec average, pushing down overall production by 2.4ppt. While growth is expected to slow or decline in general-purpose, production, and business-oriented machinery (+0.2%), electrical machinery (-2.8%), and electronics parts and devices (-0.5%), these categories are not expected to decline as much as transport equipment, so it is not the case that production is expected to drop significantly throughout the manufacturing sector.”