2.2%: Japan's factories decline due to earthquake and war in the Middle East
WHAT HAPPENED
Japan's industrial production fell 2.2% year-on-year in August and 1.7% compared to July, well below expectations. Retail sales grew by 2.7%, but also fell short of the forecast of 3.3%.
WHY IT MATTERS
An earthquake damaged auto and semiconductor factories in Kyushu. Additionally, the war between the U.S. and Iran increased costs and delayed ships carrying raw materials. With inflation and a weak yen, households are also spending more cautiously.
AND FOR YOUR PORTFOLIO
The combination may first affect manufacturers of cars, electronics, and machinery: less production, scarcer parts, and slower deliveries. In other countries, including Mexico and Brazil, this may translate into higher prices or longer waits for some products.
💬 TELL IT LIKE THIS
“When Japan produces less, the impact can reach global wallets through more expensive or delayed cars, cell phones, and computers.”