Japans industrial production experienced a sharp decline in January 2024, shrinking by 7.5% month - on - month, setting the worst record since May 2020. This decline is astonishing, mainly due to the production interruption of Daihatsu Motor and the impact of a strong earthquake at the beginning of the year on several factories under Toyota.

Daihatsu Motor, a subsidiary of Toyota Motor, has seen its total production severely affected due to its involvement in a scandal involving the manipulation of vehicle safety test results. This scandal not only damaged the companys public image but also led to a temporary halt in the production line. In addition, the strong earthquake that hit Japan on January 1, 2024, further exacerbated the difficulties in industrial production. Some other factories of Toyota also had to suspend production, further affecting the countrys industrial output.

According to the data released by the Ministry of Economy, Trade and Industry of Japan, the seasonally adjusted industrial production index was 97.6 points, with 100 points representing the production level based on 2020. Among the 15 related industries surveyed, 14 industries reported a net contraction in output. Especially in the automotive industry, the actual decline was 17.8%, making it one of the most severely affected industries.

Although Japans industrial production has been severely hit, the countrysforeign tradeperformance is different. In January 2024, Japans exports increased by 11.9% year - on - year, showing growth for the second consecutive month. In contrast, imports decreased by 9.6%. The growth in exports was mainly due to a 29.2% surge in exports to China, as well as 15.6% and 13.8% growth in exports to the US and the EU respectively. Despite the growth in exports, due to the decline in imports, Japans monthly foreign trade balance in January still showed a negative value of 1,758 billion yen (about 11.7 billion US dollars).

This series of economic indicators in Japan reveals the complex situation the country is facing. On the one hand, Japan has maintained its competitiveness in global trade, especially achieving significant growth in exports to China. On the other hand, the significant decline in domestic industrial production, especially due to the停產 of Daihatsu Motor and the impact of natural disasters, poses a serious challenge to economic recovery.