Doha:Japan's industrial output fell by 1.7% in August 2026 compared to the previous month, defying market expectations of a 1.7% increase, according to preliminary data released by Japan's Ministry of Economy, Trade and Industry.

According to Qatar News Agency, this marks the second consecutive monthly decline in industrial production, following a 0.2% drop in July. However, on an annual basis, production increased by 3.4% in August, compared to 3.9% growth in July, marking the third consecutive month of year-on-year growth.

The downturn in August was driven by declines in several key sectors. Motor vehicle production decreased by 6.8%, reversing a 0.8% increase in July, while general-purpose and business-oriented machinery production fell by 6.0%, compared to a 1.9% rise in the previous month. Additionally, the production of petroleum and coal products dropped by 13.3%, following an 8.6% increase in July.

In contrast, some sectors experienced growth. Production machinery output increased by 6.1%, and transport equipment output, excluding automobiles, rose by 2.9%. Chemicals production, excluding certain types of chemicals and pharmaceuticals, saw a modest increase of 0.7%.

The unexpected monthly decline in industrial output comes despite earlier forecasts predicting a recovery in August, following the revision of July's reading from an initially reported 0.1% increase to a 0.2% decline.