Japan’s factory output weakens

Currencies, Economic growth

The blog has been following the debate over ‘decoupling’ with some interest. With the US going into a downturn, it is critical to understand whether Asian chemical markets will follow. Until recently, they have been buoyant, allowing US companies to make up for some of the decline in their domestic markets via exports. But I suggested back in December that this would probably not last.

Today’s news from Japan tends to confirms my scepticism. Factory output fell 2% in January. Bloomberg reports this was because ‘a deepening US slump weakened demand for cars and electronics’. Even worse, companies expect output this month to slide a further 2.9%. March may be better, as inventories will have been worked off.

Japanese central bankers can do little to stimulate the economy, with interest rates near zero. Governor Fukui said last week that ‘a deeper slump in the world’s biggest economy (the US) would have adverse effects on the emerging markets that Japanese exporters depend on’. With the US$ weakening as well, markets seem likely to get increasingly tough for Asian chemical companies.

PREVIOUS POST

US housing weakens, UK follows

26/02/2008

US housing markets are getting worse. Today’s S&P/Case-Schiller index show...

Learn more
NEXT POST

M&S dumps free plastic bags

29/02/2008

China’s move last month to charge for plastic bags has now been followed by th...

Learn more
More posts
The New Normal for global industry
31/05/2020

The global chemical industry is the third largest sector in the world behind agriculture and energy,...

Read
Debt, deflation, demographics and Brexit set to challenge London house prices
17/05/2020

London property websites haven’t used the word “reduced” for many years. But it...

Read
The bill for two decades of doomed stimulus measures is due
03/05/2020

The Financial Times kindly made my letter on the risks now associated with central bank stimulus the...

Read
Local supply chains replace global trade as world starts to “do more with less”
26/04/2020

Something quite dramatic is happening in the global economy.  Of course, Wall Street analysts still...

Read
Financial markets enter their Convulsion phase
19/04/2020

Many companies and investors are still comparing today’s downturn to the 9-month hiccups seen afte...

Read
World risks moving from Denial into Anger as the Paradigm of Loss moves forward
12/04/2020

The head of the IMF has warned again on the likely scale of the economic depression ahead: “Gl...

Read
The world has wasted 3 months – there is little time now left to avoid a Covid-19 catastrophe
05/04/2020

It is now 3 months since China’s state television broadcast the first news of the Wuhan virus,...

Read
A new recession era to emerge
22/03/2020

Contingency planning has become mission-critical. The longer the coronavirus pandemic continues, the...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more