Japan Output Drops While South Korea Factories Gain in July

Japan’s factory output contracted more than expected in July, with preliminary data from the Ministry of Economy, Trade and Industry showing a 1.6% month-on-month decline versus economists’ projections for a 1.1% drop. Production fell 0.9% from a year earlier after a 4.4% gain in June. Consumer demand also softened: retail sales slid 1.6% on the month and edged up just 0.3% year-on-year, far below the 1.6% increase analysts had anticipated, while department-store and supermarket sales rose 0.4%. In contrast, South Korea’s manufacturing sector continued to gather momentum. Statistics Korea reported a 0.3% monthly rise in industrial production for July, topping the 0.2% consensus, while year-on-year output expanded 5.0%, accelerating from 1.6% in June and beating the 3.9% estimate. The diverging readings underscore uneven conditions across North Asia’s export-orientated economies as they navigate shifting global demand for electronics, autos and other manufactured goods.