Japan Factory Output and Retail Sales Fall in August, Pressuring the Yen

Japan's industrial production fell 1.7% month-on-month in August, marking a second straight monthly decline and missing expectations of a 1.7% expansion. The downturn was led by a 13.3% plunge in petroleum and coal products, a 6.8% drop in motor vehicles, and a 6.0% decrease in general-purpose machinery. Domestic consumption also weakened, with retail sales sliding 1.2% month-on-month and slowing to 2.7% year-on-year. The softening data diminishes market expectations for an October Bank of Japan interest rate hike following September's increase to 1.25%, putting downward pressure on the Japanese yen.