Japan Aug factory output seen rising for third month but slow recovery seen - Reuters poll

TOKYO (Reuters) - Japan's factory output likely rose for a third straight month in August but at a slower pace, suggesting a recovery in manufacturing activity will be moderate, a Reuters poll showed on Friday.

Industrial output is expected to have risen 1.5% in August from the previous month, the poll of 17 economists showed. It had jumped a revised 8.7% in July, the fastest on record, as domestic and global demand began to slowly recover from coronavirus-induced slumps.

"We expect broad gains in the production, including electronic parts and devices, and transport machineries," said Yusuke Shimoda, senior economist at Japan Research Institute.

"But the level of recovery in the factory output will still be about a half of losses caused by the coronavirus outbreak."

A business survey released this week showed factory activity continued to contract in September amid subdued demand, but new orders were falling at a much slower pace and manufacturers were more confident in the outlook.

The Reuters poll also found retail sales probably fell 3.5% in August from a year earlier, which would mark a sixth-straight month of decline, as fears of contracting the virus kept consumers at home.

The trade ministry will release both factory output and retail sales at 8:50 a.m. Japan time on Wednesday, September 30 (2350 GMT Tuesday).

Analysts forecast the jobless rate edged up to 3.0% in August from 2.9% in the previous month and the jobs-to-applicants ratio, or availability of jobs, likely worsened to 1.05 last month from 1.08 in July.

"After the economic activity restarted from late May, some people are returning to work but the pace of recovery is slow," said Takeshi Minami, chief economist at Norinchukin Research Institute.

Deflationary pressures are expected to persist. Tokyo's core consumer price (CPI) index, which includes oil products but excludes fresh food prices, likely fell 0.3% in September from a year earlier, the same rate of decline seen in August, the poll showed.

Weak energy prices such as electricity and gas weighed on consumer prices, analysts said.

The government will publish Tokyo core CPI at 8:30 a.m. Japan time on Tuesday and jobs data on Friday.

(Reporting by Kaori Kaneko; Editing by Kim Coghill)