TOKYO, Oct 31 — Japan’s industrial output fell less than expected in September and companies expect output to rise in October — keeping the economy on an expansion path.

Labour demand remained at the strongest level in 43 years, but household spending unexpectedly fell in September, raising some concern about the lack of impact a tight jobs market had on consumer spending.

The Bank of Japan is expected to signal at a policy meeting ending today that it will hold off on expanding stimulus for the time being, but it may still struggle to explain why economic growth is not pushing up consumer prices.

"Industrial output fell due to temporary weakness in China’s economy, but global demand remains solid, so output will rise in the future,” said Daiju Aoki, regional chief investment officer for Japan at UBS Securities.

"Consumer spending looks a little weak. It’s important for the BOJ to see a recovery in consumption. Unless this happens, the BOJ could lower its growth forecasts in the future.”

Industrial output fell 1.1 per cent in September because of a fall in output of memory chips, equipment to make flat panel displays, and heavy machinery used in construction, trade ministry data showed today.

The fall was the largest in four months but still less than the median estimate for a 1.5 per cent decline.

Manufacturers surveyed by the trade ministry expect output to rise 4.7 per cent in October and fall 0.9 per cent in November.

Japan’s jobless rate held steady at 2.8 per cent in September, data from the Internal Affairs Ministry showed, matching the median estimate.

The jobs-to-applicants ratio also held steady at 1.52 in September from the previous month, showing labour demand remains at the strongest in 43 years. The median estimate was for 1.53.

Household spending fell 0.3 per cent in September from a year earlier in price-adjusted real terms, compared with economists’ median estimate of a 0.7 per cent annual increase.

The decline was due to lower spending on golf, travel, air conditioners and refrigerators, the data showed.

Domestic demand was brisk in the first half of the year, but the weaker-than-expected household spending data suggests it is now losing some momentum.

Economic growth has been slow to translate into higher consumer prices, which is frustrating the BOJ’s efforts to reflate the economy.

Core consumer prices rose 0.7 per cent in September from a year ago, well away from the BOJ’s 2 per cent inflation target. 

Samsung Elec Q3 profit nearly triples to new record

Q3 op profit 14.5 trln won, tops Q2 as highest-ever

On track to book record annual profit on chip boom

Says to pay 29 trln won in dividends in 2018-2020 (Adds Samsung statement, background)

By Joyce Lee

SEOUL, Oct 31 (Reuters) — Samsung Electronics Co Ltd said today it will pay dividends of about 29 trillion won in the 2018-2020 period as it reported record operating profit for the three months through September, lifted by its largest-ever memory chip earnings.

The world’s biggest maker of memory chips, smartphones and television sets said the memory chip "supercycle” of tight supply and strong demand was set to continue as servers and mobile devices require ever greater processing capacity.

"For 2018, the company expects earnings to grow primarily from the component businesses, as conditions in the memory market are likely to remain favourable and the company expects increased sales of flexible OLED panels,” the South Korean tech giant said in a statement.

Samsung is on track for record full-year profit, with analysts forecasting even better fourth-quarter on strong memory chip prices and organic light-emitting diode (OLED) screen sales for Apple Inc’s iPhone X.

It also announced a shareholder return policy for the next three years, ramping up returns guidance to a level higher than its current range of 30-50 per cent of free cash flow to 50 per cent over three years.

Operating profit nearly tripled in the third quarter from the same period a year earlier, to 14.5 trillion won (RM54.7  billion), Samsung said in a regulatory filing, matching its earlier estimate.

Revenue jumped 29.8 per cent to 62 trillion won, also in line with its earlier estimate.

The chip business was Samsung’s top earner as it booked a record 10 trillion won operating profit, from 3.4 trillion won from the previous corresponding period. Client demand for more powerful devices and supply constraints pushed up prices of both DRAM and NAND memory chips, widening profit margins.

In the mobile sector, Samsung has put last year’s costly withdrawal of the fire-prone Note 7 gadget behind it and posted a jump in mobile profit to 3.3 trillion won from 100 billion won last year.

More than 4 million Galaxy Note 8 smartphones have been sold since the premium model was launched in mid-September, making up for slowing sales of the Galaxy S8 launched earlier in 2017, analysts said.

The record earnings come after Samsung Electronics CEO and Vice Chairman Kwon Oh-hyun announced on October 13 that he plans to step down from management.

His departure leaves key roles vacant — head of the components business including memory chips, head of the display business, as well as chairman of the board and a board director.

Samsung Electronics shares were down 0.7 per cent soon after the earnings release, while the Kospi benchmark share price index was flat. — Reuters