MNI BRIEF: BOJ: Longer Adjustment For Auto Output; Trend Key

Bank of Japan officials expect production adjustments in the automobile industry to take longer than expected as the fire at chipmaker Renesas Electronics has aggravated the semiconductor shortage but they view the impact on output as temporary, MNI understands.

While the underlying trend will not worsen significantly, BOJ officials are unable to estimate the magnitude of the decline in production in the January-March period and the duration of output adjustments. The hit to auto production due to the chip shortage is set to spill into a range of industries, increasing downward pressure on overall production.

Renesas said Sunday that it may take up to a month to resume output at the fire-damaged main factory in Hitachinaka, northeast of Tokyo, and over three months for supply chains to return to normal.