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Japanese factory output slips for a second month

Japanese factories cut their output for a second straight month in February amid weak demand from the sluggish US economy, official figures showed yesterday.

Japan's industrial output fell by 1.2 percent in February from the previous month, following a 2.2-percent drop in January, the government reported.

It was the first time since last May that output has declined for two straight months.

Although market forecasts had been for a bigger decline of 2.2 percent, analysts found little to cheer about in the lackluster report, which comes amid growing jitters about the health of the world's second-largest economy.

"The drop was smaller than expected but this does not allow us to view this data positively," said Keiji Kanda, economist at Daiwa Institute of Research.

He said that auto exports -- which along with electronic goods have been a key driver of Japanese economic growth in recent years -- were becoming sluggish due to the weakness of the US economy and a stronger yen.

The production of electronic parts and devices also declined in February amid slower exports to China, which imports parts from Japan and ships finished products to the US and European markets.

Output from the sector may remain sluggish until the second half of the year as developed economies such as the US are unlikely to recover rapidly from the current slowdown, Kanda said.

Factory production figures are expected to show a 2 percent rise for last month but decline 1 percent this month, the Trade and Industry Ministry said.
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