On Thursday, the Japan’s cabinet office released the industrial data production for the August period. It could be seen that the numbers declined by 3.2 percent month – over – month. 

That was lower than the economy expert forecast who predict that the factory output will decline by 0.5% after the 1.5% slipped happened on July. Howe about the year – on – year basis?

The Japan’s factory output data in August was still making the 9.3% growth from the previous year. It slipped from the achievement of 11.6% in July. What are the causes? 

Japan's factory output, which fell for a second straight month in August, was largely due to a drop in auto production. Some consumer countries in the Asian region experienced an increase in Covid Delta cases.

Pandemic Still Brings It’s Impact

The increasing cases of COVID-19 thus suppressing demand for the sakura country automotive products. The fact is that, the trend is also happened on the other aspects. 

In addition, barriers to the global shortage of semi-conductor (Chip) products have also underpinned the decline in Japanese car production in recent times. That is not good for sure.

Meanwhile, the Japanese Retail Sales data released separately this morning showed a 3.2 percent drop on an annualized basis in August. This was the first drop in retail sales in six month.

That was also worse than the economists' forecasts for a 1.0 percent drop after japan's previous month's retail sales data still chalked up an annualized 2.4 percent increase.

Lockdown Is Also the Cause 

Japan's declining retail sales data throughout August was actually inseparable from the Japanese government's move to impose social restrictions on Tokyo and several other regions. 

These restrictions have far-reaching impact to cover 80 percent of the population in that country. It also putting enough pressure on consumer sentiment that was previously fragile.

The Analysts expect that the Japan's economy can grow by 1.2 percent in the third quarter. This is actually the weakest pace of growth of any developed countries in the world. 

In an effort to boost the consumption sector, the Japanese government in its latest report plans to lift Covid-19 restrictions across the region. This step was taken following a decrease in coronavirus cases.

USD/JPY is in a Profit Taking Action

Overall japan's fairly disappointing fundamental data this morning did not have a high impact on the yen's currency movements against the US dollar as a major pair in the market. 

This condition is reflected by the PAIR of USD / JPY which is currently in the range of 111.84 or weakened 0.08 percent on a daily basis. The experts give their prediction about the causes. 

This weakness is more due to the action of profit taking by the long dollar positions after chalking up a sharp rally in the previous six sessions. Furthermore, sterling is significantly dropped. 

That currency was drastically slipped down in the yesterday New York session until this day. This sterling have been showing the dangerous signal before since the increasing gas price.

The Position of GBP/USD

As the news was written at the start of the European session, GBP/USD had touched a low record since January at the level of 1.3500. EUR/GBP consolidated at its highest range since July.

Meanwhile ,the GBP/JPY fell into the 150.20s range. The Rising energy prices are nothing new. The commodity supercycle has ushered the prices of crude oil, natural gas, and energy commodities.

They are ushered into a very convincing bullish trend. However, the energy crisis is rife in the UK due to limited supply from abroad and a lack of domestic supplies ahead of winter.

Last winter, the Asian importers were Stockpiling more energy commodity inventories so as not to be hit by this year's price surge. Europe is out of competition, so gas storage locations are only filled by about 70 percent.