Japan's industrial production was up a seasonally adjusted 1.8 per cent month-on-month in October, the ministry of economy, trade and industry (METI) said in today's preliminary reading. This is the first the country's industrial production increased in four months.

The headline figure beat expectations of a 2.0 per cent decline following the 4.1 per cent decline in September.

On yearly basis, industrial production was down 4.3 per cent - as against forecasts of a fall of 8.0 per cent after an 8.1 per cent fall in the previous month.

METI, however, maintained its assessment of a downtrend in industrial production.

Among the industries that contributed to the increase in October were electronic parts, fabricated metals and transport equipment, while commodities contributing to the decline included metal oxide semiconductor ICs, active matrix LCDs and photovoltaic modules.

According to the survey of manufacturing, production was expected to fall 0.1 per cent in November and rise 7.5 per cent in December. Industries contributing to the fall in November included transport equipment, electronics equipment and iron and steel.

Industries that marked the increase in December included transport equipment, electronic parts, electrical parts and general machinery.

Inventories rose 0.3 per cent month-on-month, increasing for the first time in three months and were also up 4.2 per cent year-on-year thanks to gains among electronic parts, electrical machinery and petroleum and coal products.

The inventory ratio fell 1.8 per cent month-on-month in October, following previous month's increase. It also increased 9.8 per cent year-on-year.

Core consumer prices in Japan remained unchanged on an annual basis in October, beating forecasts of a 0.1 per cent contraction, which would have been unchanged from the September reading, according to the ministry of internal affairs and communications.

Overall nationwide consumer prices fell 0.4 per cent year-on-year, in line with forecasts following the 0.3 per cent fall in the previous month. On a monthly basis, core CPI were unchanged.

Japan's retail sales were down for the first time in three months in October, with an end to subsidies for buying greener cars hurting domestic demand and the global slowdown clouding prospects for jobs and wages, according to data released by the ministry.

In October, retail sales fell 1.2 per cent year-on-year, much worse than the median forecast by economists for a 0.6 per cent fall in a Market News International (MNI) survey.

In October, retail sales of automobiles slumped 3.5 per cent, following a 1.5 fall in September, which was the first fall in 12 months.

According to the latest industry data, new vehicle sales in Japan were down for a second straight month in October after making the first annual decline in 13 months in September.

The government withdrew subsidies for buying low-emission vehicles in September, which led to new vehicle sales  falling 9.0 per cent in October after an 8.1 per cent decline in September.

Meantime, retail sales rose 0.7 per cent in October, after a 0.1 per cent increase in September.

Retail sales of machinery and equipment, including consumer electronics, posted a 15th straight year-on-year drop, even as the pace of decline increased to -5.8 per cent in October from -1.4 per cent in September.