Korea industrial output disappoints, but Japan a bright spot

SEOUL - After registering better-than-expected Q3 GDP growth (1.1% q/q s.a.; 3.3% y/y), growth momentum in South Korea appears to have slowed in September, with a disappointing industrial production outturn of -2.1% m/m s.a. (prior: +1.6%). BBVA Bank says that while part of the decline is due to strikes at car factories and fewer working days due to holidays, the outturn coincides with a moderating trend in China’s September activity data and is a reminder of the headwinds facing Asian growth momentum.

In contrast, activity indicators in Japan continued to improve in September, with retails sales rising by 3.1% y/y (prior:1.1%) and industrial production increasing by 5.4% y/y prior: -0.4%). However, BBVA says the market is increasingly focussing on the design and implementation of structural reforms to boost long-term growth. www.bbvaresearch.com (ATI).