Japan factory output down, inflation slows in November

Japan's factory production suffered a surprise drop and inflation continued to slow in November, official data showed Friday despite Prime Minister Shinzo Abe's pro-spending policy blitz to stoke growth.

   November industrial production fell 0.6 percent from the previous month, the industry ministry said, against a market forecast for a 0.8 percent rise.

   "Industrial production fluctuates indecisively," the ministry said in a monthly report, leaving unchanged its overall assessment despite the downturn after two months of rises.

   Separate data showed core consumer inflation continued to slow in November.

   Inflation, excluding volatile prices of fresh food, slowed to 2.7 percent from 2.9 percent in October, according to data from the internal affairs ministry.

   Prices rose from year-earlier levels largely because the government raised sales tax from 5.0 percent to 8.0 percent on April 1, which drove up retail prices.

   Adjusted for the tax increase, the nationwide core consumer-price index rose 0.7 percent from a year earlier in November, the lowest since September 2013.

   The reading was far short of 2.0 percent inflation targeted by the Bank of Japan.

   After taking office in late 2012, Prime Minister Abe launched a policy blitz which meshes government spending with massive monetary easing by the central bank and reforms to the highly regulated economy.

   The pro-spending growth bid, dubbed "Abenomics", has stalled as the April hike in the sales tax dented consumer spending.

   The prime minister delayed the second tax hike planned for next year to 2017.

   The tax rises are aimed at paying down Japan's enormous national debt, but they have put Abe in a tricky position as he tries to balance them with his pro-spending growth plan.

   Millions of shoppers launched a last-minute buying binge on everything from cars and washing machines to televisions and alcohol, before the April 1 increase.

   The internal affairs ministry on Friday also said household spending fell

2.5 percent year-on-year in November while the jobless rate stayed unchanged at 3.5 percent. (AFP)