Japan’s industrial production registers surprise fall in July, BoJ to remain in limelight next week

Industrial production in Japan, a broad measure of factory output registered a surprise fall during the month of July; however, the Bank of Japan (BoJ) is expected to steal the limelight in its monetary policy meeting scheduled to be held on Sep 21 at 3:00AM GMT.

Japan’s industrial production declined 0.4 percent in July after rising 2.3 percent in June, data released by the Ministry of Economy, Trade and Industry showed Wednesday. A median estimate of economists forecast zero growth following the preliminary estimate August 31.

Further, on an annualized basis, output fell 4.2 percent. Japan’s capacity utilization climbed 0.6 percent, official data added. Also, the Cabinet Office has revised its estimate of second quarter gross domestic product to 0.2 percent, from a preliminary forecast of zero.

According to a recent report from Nikkei, the BoJ may consider lowering interest rates further into negative territory next week. That would mark the first rate cut since January, when policymakers first ventured into negative-rate territory.

Meanwhile, as quantitative easing nears its practical limits, the central bank is looking to make interest rates the centre of future easing campaigns.